Getting out of debt can be a challenge if you have maxed out all your credit cards. This is a condition when just meeting the minimum payments on each card becomes a burden. However, you would be surprised on how easily you can pay off your debts through a planned budget. Thorough this article we will try to guide you on how to get out of your credit card debt.
Analyse your finances: Getting rid of debt starts by knowing how much debt you have to tackle. For this you will need to look into your recent credit card bills or your credit report. This will give you an idea of how much debt you have. You can make a list of all the debts you have with their balances and interest rates. You will also need a list of all the expenses you make in a month’s time. If you deduct your monthly expense from your income you will get the amount which is available to pay off your debts.
Planned payment: You will need a payment plan in order to direct your extra money towards paying down debt. It is preferred to start from the debt which has the lowest balance. This debt is easy to pay off which boosts the morale of the debtor. For two debts with similar amount, choose the one which has higher interest rate. Once you have paid off one debt, you can channelize the remaining fund to pay off your next debt.
Negotiate with creditors: Call up your creditors and negotiate with them to reduce your interest rates. You can inform them about other creditors offering you a lower interest rate. This will help in bringing down your monthly payment.