Getting Out of the Credit Card Debt Trap

Your bills have been piling up, and you can’t bear to open them. If you find yourself struggling to keep up with your monthly credit card payments or other debt payments, you are not alone. According to the American Bankers’ Association, the average American family is now carrying between $8,000 and $9,000 in credit card debt alone. Today, we owe more on our homes, cars, loans, insurance and education than any previous generation has.

Despite this, know that you can get back on your feet to reduce your stress and secure your financial future. There’s a lot you can do to reduce your debt and improve your financial situation. Dave Ramsey says you need to be willing to work and sacrifice in order to fix the situations that you created with your own irresponsibility.

To get rid of your debt, or at least a huge chunk of it in just a few months, you need to learn how to settle your debts. Here’s what you can do:

Make a list of your debts.
This may sound scary, but this is the only way you can get a picture of where you are now in your financial situation. To get rid of your debt, start by listing down the individuals and companies you owe money to. Opposite the names, write down how much you owe and what rate of interest you’re paying on each of those debts. Get the latest letter or statement for each debt together in one place so that you can easily confirm if your list is accurate. Most likely the main culprits will be your credit cards.

Decide which debts to pay off first.
Contrary to what most people say that you need to work on those cards with the highest interest rates first, it’s actually wiser to attack the smallest debt first, while still maintaining minimum payments on everything else. Keep stepping up to the next larger bill. You will find that when you start knocking off the easier debts first, you will actually see results faster and create momentum in your debt snowball. This will help you believe that you can and will win in debt reduction.

Get better credit card rates.
Since your credit cards are most likely the ones giving you the most headaches, here’s what you can do: Call the toll-free number on the back of each card, and ask the customer service representative if they can offer something to help you lower your current rate. Compare your options and find the best deal for you, then keep working until you pay off all of your credit card bills. You can also try to consolidate your debt into one card with an interest rate lower than what your current cards are charging you. You’ll be amazed at how much this can lower your monthly payments.

Check your credit score.
How reliable are you when it comes to paying back money you owe? Your credit score is representative of this. Your credit report contains a history of how you’ve paid your bills, how much open credit you have, and anything else that affects your credit-worthiness. This incredibly important number affects how much you pay for credit and other living necessities. You should be able to understand that number, find out how it’s calculated and learn how to improve it. The time is now, and you know it.

Find out how you can rid yourself of all of the headaches that your credit cards can give you. Avoid getting into debt with MiCash, the leading provider of financial services to under-served consumers and a pioneer in offering remittance-enabled general purpose, reloadable, prepaid debit cards as well as remittance-enabled payroll debit cards. With MiCash, you can truly be debt-free!

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