Credit card debt piles up quickly. Perhaps you lost your job or needed to purchase a new furniture set and now don't have the hours earned enough to pay the debt. Maybe you put medical bills on your credit cards but are in over your head in debt thanks to high interest rates.
Whatever the reason is for your debts, there is a way forward. These three tips can help you eliminate your credit card debt, so you can become financially stable once again.
1. Try the snowball effect
The snowball effect is one that works well for people who have money to pay the minimum payments on their debts each month. With this process, you place slightly more than the minimum payment on one debt each month while paying the minimum on others. As soon as one credit card or debt is paid off, you then take all of that money and place it on the next highest debt. Continue doing this until your debts are paid off completely.
With this process, you can see yourself making progress more quickly than if you continued to make minimum payments each month alone.
2. Negotiate your interest rates
The next thing you should consider is negotiating your interest rates. If you've always paid on time and have been with the company for a significant amount of time, it's worth calling and asking if you can have your interest rate reduced. If so, it could reduce your monthly payment, which helps you get ahead. Continue to pay the same amount you always did, and the money will go further than before.
3. Consider bankruptcy
Bankruptcy could be a good option for you if you are falling behind on payments, don't have an income that can help you catch up and don't see yourself getting back in control of your finances within the next few months. There are a few different kinds of bankruptcy including Chapter 7 and Chapter 13 that your attorney can discuss with you. Contrary to the way bankruptcies are talked about, none of these bankruptcies aim to make you lose everything. Instead, they help you shed debt and start over with what you need.
Your attorney can talk to you more about your options if you're in debt. The right solution is waiting for you.