A budget plan
is a simple income and expenses statement for
the week or month. It enables you to work out
how much money you have spare each. From this
work out how much you can afford to pay off
your credit card bills. If necessary work
extra hours and use the income to reduce the
bill quickly.
4. Switch
the balance with a 0% Balance Transfer
To help you to
get out of credit card debt quickly move your
balances to a new card offering 0% balance
transfers. Then pay your budgeted amount to
reduce the balance as much as possible within
the 0% period. This way every dollar reduces
the bill.
At the moment there are some cards still
offering 0% without a balance transfer fee but
I suspect these will disappear soon. Apply for
these, if available, otherwise you may have to
pay the 2 to 3% balance transfer fee.
5. Take out an Unsecured Personal
Consolidation Loan
If after budgeting you are only able to pay
the minimum, or just a little bit more, you
may have to consider an unsecured
consolidation loan to immediately get out of
credit card debt.
Take out an unsecured loan as this will not
put your home at risk. Currently is it
possible to get some very good rates on
unsecured loans so shop around.
Set the repayment term as short as possible
and cut up your credit cards to avoid being
tempted again.
6. Consider a Secured Personal
Consolidation Loan
If you own your own property then the bank
or lender may insist on a secured
consolidation loan.
A secured consolidation loan simply means
that you have to put up your property as
security for the loan. The bank can, if you
fail to make the payments, take possession of
your home and sell it to get their money back.
Using secured consolidation loans to get
out of credit card debt is not generally
advisable. The interest rate will probably be
no less, and is often higher, than the
unsecured loan but your home is at risk.
7 . Refinance your mortgage
If you own your own home you may be able to
refinance the loan (re-mortgage) for a higher
amount and use the surplus to get out of
credit card debt.
In many ways this seems an attractive
proposition as interest rates are very low at
present. If there is sufficient equity (value
in excess of your borrowings) in your home
your existing mortgage lender or another
lender will lend additional funds.
If you can avoid this option I would
recommend not to take it as you are converting
short term debt to a long term mortgage and
your home is at risk.
In the end you will pay more however, if
the choice is between continuing with your
credit cards with their high interest payments
or a re-financing of your home, then the
re-financing is an option.
Credit cards are one of the most expensive
forms of debt and banks and other lenders are
making billions every year from individuals
with credit cards.
If you must have a credit card, and I
confess I still have one, then use it only for
exceptional purchases that can be repaid
within a few months.
Don't use your credit cards for day to day
living expenses, do your budgeting and help
yourself get out of credit card debt.
John worked
for many tears in insurance and finance and
now writes articles on a number of topics
including debt management. For more
information go to http://www.card-debt.net
Borrowing
long term on a credit card not a sensible way of
managing money but millions of card holders are doing it
every month. Here are seven ways to help you get out of
credit card debt fast.
