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What are the smart ways to eliminate your credit card debt?.

After the colossal financial collapse in the US, many people suffered job loss as well as wage deduction. In this situation, they failed to make payments on time and incurred insurmountable amount of debt. The interest charged on the credit cards are high, so accruing interest on the principal balance can make it unaffordable to pay off. Therefore, if you default on your credit card payment, then negotiate with the credit card company for settlement of credit card debt. You can pay off your credit card debts with ease if you follow the steps given below.

1. Create a Budget plan: When you are planning to pay off your debts ensure that you create a budget plan. Preparing a budget can help you keep a track of your income as well as expenses. You can avoid splurging your hard earned money and use the extra money towards paying off your debt. Make sure you avoid dissuading from the budget plan as it can further complicate your financial situation.

2. Prepare a list of debts: Prepare a list of the debt you owe in descending order of the interest rate. The highest interest debts are required to be listed on top of the list. Start paying off the debts on top of the list and make minimum payments on the remaining balance. Make sure you continue the process until you pay off the debts completely.

3. Negotiate with the creditors: You can negotiate with the creditors to lower the outstanding balance to make it affordable to pay off. If the creditors are not wiling to negotiate settlement, then threaten to file bankruptcy. The creditor may not receive a penny if you file bankruptcy; therefore he may agree to settle debt with you. In case you are unable to negotiate with the creditors, hire professional debt arbitrators to settle debt on your behalf.

4. Transfer credit card balance to another card: You can transfer your credit card balance to another card with introductory offer. You can transfer your high interest debts to another low interest rate card. When you transfer the current balance into a new card with low or introductory rate offer, it can help to lower your monthly payment. Try to make your payment on time before the introductory offer expires. The interest on the new card may bounce back to the interest charged on the average cards once the offer expires. This can further complicate your financial situation.

5. Increase your income to pay off debt: You can take up freelance work during your spare time to increase your income. If you’re interested in cooking or baking, then prepare snacks or biscuits to supply it in offices or in parties. This can help you earn some extra money without investing a penny. Make sure you use the money to pay off your credit card debts.

Therefore, these are a few smart ways to pay off your debts and regain control over your financial situation. When you are working on paying off your debts, avoid using your credit cards as it can further complicate your financial state.