It is possible to go from paying off the balance on credit cards each month to an insurmountable mountain. Life happens. One serious injury, a lengthy illness or a job loss can tip the scales.
If each month seems to get worse, options exist. While you might not know how to pay it off, remedies do exist. Be proactive and learn some initial tips by reading this post.
Here are three options to consider that can help you pay off credit card debt.
1. Try consolidating your debts
The first thing you can try to help get your debt under control is consolidation. Debt consolidation can be a huge help if you're able to take out a personal loan or to obtain a no-interest credit card.
For example, if you transfer balances from five credit cards with interest around 18% to a zero-interest credit card, you will only be paying on your principle balance (plus transfer fees). Your payment may drop, making it easier to pay off the debt. Keep in mind that the interest rate may be an introductory offer, so you have to pay off the debt within the specified time frame or may have the interest added back on at a later date.
2. Try the snowball method
If you don't want to transfer your debts, another option is to use the snowball method. With the snowball method, you begin by paying each debt's minimum payment. Then, choose one debt to pay additionally on.
For instance, you may have three credit cards for $5,000, $2,000 and $1,750. Pay the minimums, perhaps $50, $25 and $25, then take any additional money you have and put it toward one of those debts. Some people like to start with the largest debt, while others start with the lowest.
After that debt is paid off, roll the additional minimum payment into the extra payments you make on the next debt. This "snowballs" into larger payments that pay off your debts quickly.
3. Consider bankruptcy
With bankruptcy, you have the potential to wipe out your debt completely. There are several kinds of bankruptcy, but Chapter 7 and 13 are the most common. With Chapter 13, you repay debts over time on a scheduled payment plan, while Chapter 7 requires you to liquidate some assets to pay off what you owe.
These are three options for tackling your credit card debt. It may be overwhelming, but an attorney can help you find a solution.