Eliminate Credit Card Debt

Eliminate Credit Card Debt: It can be easy and permanent
Don’t you wish you could free yourself of existing liabilities and eliminate credit card debt? It can be fairly easy and you can actually get rid of it permanently – if you make some smart moves. We show you how.

Steps to financial planning
There are some easy ways in which you can start planning your finances and take control of the situation. Life need not be an endless tug of war, trying to make ends meet.

Assess your budget
The first thing you probably need to do is to take stock of your finances, income and expenses. Calculate how much income you get every month, then assess your monthly expenses. Finally calculate how much savings you’re able to set aside, if any. If you find you’re unable to keep aside anything for savings, then assess your expenses. Find out areas where you could possibly cut down on. For example, there are plenty of tips on the Internet that help you live frugally and on a budget. That doesn’t mean you compromise on the basic necessities. It just means cutting down on things you can do without. Also remember this is only for sometime – till your finances are a little better.

Calculate debts:
In order to successful eliminate credit card debt you need to assess every little detail. So whether it’s a loan you’re paying off each month, or many credit cards at hand, you’ll need to sift through each of these. You need to find out:

How much outstanding you have on each
What’s the interest rate on each and
When does the repayment period end

Start paying off
Once you have the answers to these, it’s easy to start the planning. First prioritize payment according to:

Repayment period
Interest rate
Outstanding balance

In that order. The reason being, that if the repayment period is ending soon, that liability deserves immediate attention. Else the bank will start calling you reminding you of payments. They will then seize your assets to recover costs. You want to avoid this as far as possible.

Once you have cleared the payment on these, check on the interest rates of remaining credit cards. The higher interest rates need to be paid off first. Higher interest means more liability.

Then look at the outstanding balances on the remaining cards. The ones with smaller outstanding balances can be paid off faster. Therefore pay off the ones with smaller balances. That will help you improve your credit rating quickly as well.

Consolidate your debts
If you’re finding it difficult to keep track of all your debts or their interest rates, consolidation might be the best answer. Nowadays many credit cards offer 0% rates on their balance transfers. This way you can transfer all outstanding balances on your current credit cards and loans into a new card. The lower interest rate will save you money. Plus having all debts consolidated into one single account helps you manage them much better.

Don’t spend more than you can afford
This is the golden rule of thumb when trying to get rid of debts. You need to spend according to your means – at least till the time your finances start to look better. Else you risk incurring even more debts.

Pay the minimum amount
It helps to keep paying the minimum amount on the credit cards every month. That way you’re steadily paying off outstanding balances. While paying off the minimum amount due, start with the credit card having the highest interest rate and then proceed to the lower interest rate, and so on. Continue to do this, till all cards are paid off.

The process to eliminate credit card debt purely depends on a positive mind, a good plan in place and cutting down unnecessary expenses.

Try one of the following resources for more information on eliminating credit card debt

CREDIT CARD TYPES

Choosing the credit card that's best for your needs and situation starts with knowing what options are available to you. The following list details the most common credit cards available:

	Balance transfer credit cards - Balance transfers are a way of transferring outstanding balances from existing credit cards to another card that offers a lower interest rate. For example, if you your have a high annual percentage rate (APR) credit card with a significant outstanding balance, you can transfer the balance to another card with a lower rate or even one offer zero interest. Typically these cards offer low balance transfer rates for a specified period of time allowing you to save hundreds (or even thousands) of dollars in monthly interest charges.
	Low-interest credit cards - These cards offer a low introductory annual percentage rate (APR) for a promotional period, after which they can change to a higher rate or a fixed-rate. If you plan on making a large purchase, it's a good idea to pick up a low-interest credit card to take advantage of the savings on interest during the introductory period.
	Cash rebate credit cards - Cash rebate cards accumulate "points" for1 every purchase you make using the card. Most cash reward cards award a point based off 1% of the purchase total, excluding interest and finance charges. For example, if you make a purchase for $1,000 the credit card will award you with 10 points (or, $10.00). These cards are great for loyal customers who make payments on-time every month.
	Reward credit cards - Reward credit cards are similar to cash rebate credit cards, but differ in that they offer various forms of "rewards" for the purchases you make. For example, you can accumulate rewards for frequent-flyer-miles, free magazine subscriptions, and even hotel and travel discounts. Ideal for those who enjoy getting something for free from their credit cards.
	Travel credit cards - Travel credit cards are ideal for the frequent flyer who travels the globe on a frequent basis. These cards accumulate significant reward points every time you make a travel-related purchase. You can gain discounted airline tickets, rent cards for free, and even get discounted hotel rates!
	Pre-paid credit cards - Pre-paid credit cards are ideal for those who are on a tight budget and don't want to fall prey to the financial pitfalls associated with standard credit cards. They work similar to gift certificates or debit cards. You deposit money into the card and then use the card to make purchases as you would a typical credit card.
	Secured credit cards - Secured credit cards are ideal for people with poor or no credit. They work on a collateral system, where you put up something of value against the debt on the card.