Posts Tagged ‘credit card problem’

As part of your goal to reduce your credit card debt or to completely paying off your credit card debt, you might need to do some negotiations with the credit card company. Don’t be surprised that credit card companies are willing to engage in negotiations as well. This is logically because it’s better for them to have you pay off your debt completely (making them recoup their ‘investment’ on you even with lesser interest) than for them to be chasing and forcing you to pay (on their part, this costs them time and money).

In order to do this, you need to speak to a credit card company representative that specifically handles such type of conciliation and dialogue. But prior to speaking with the bank or credit card company agent, you need to do your own research. Using the internet, print and other forms of media, you can acquire information regarding other things that the credit card company has to offer. You can also do some interviews with friends, relatives or officemates that have knowledge regarding the credit card that you own.

During the negotiation, your primary goal is simple – and that is for you to pay your credit card debt at the most convenient way for you. To do this, keep your discussions on the following items:

• Lower Interest Rate – Some banks and card companies allow cardholders to avail of lower interest rate especially if the cardholder always pays on time and has a good track record
• Request for Fees to be Waived – Again, there are credit card companies that are more than willing to waive a fee or two just for your satisfaction. This actually depends on the type of fee being discussed. The most common one that’s being waived is the late payment fees.
• Lump Sum Payment – If you have a sum of money that you can allot for credit card debt payment, inform the agent and try to calculate your remaining balance. This generally decreases any further interest because of the great deduction from your initial balance. Try to come up with the best possible combination of lump sum payment and rates/fees on the outstanding balance.
• Document Your Agreement – Remember the saying, “If it’s not written, it never happened”. Have your concurrence be written as future reference.

These are things that you need to keep in mind when dealing with agents regarding any negotiations on your credit card debt. It also helps you if you consult a financial expert or any of your friends, relatives and office mates that has experienced the same problem before. You can learn from what they have done.

Credit card debt is a common trouble faced by many people. Many people will want to reduce their credit card debt as quickly as possible, or simply to pay it off completely. Some people seek the help of their friends and relatives and some consult professional financial advisers.

To assist in paying off credit card debt, there are a number of tools developed available. The most common perhaps is a credit card calculator that can give you an idea how long you can pay off your debt given the amount of money that you can allot monthly, or how much money you need to shell out monthly if you want to completely pay off your debt for a specified period of time.

Here are some tips to help pay off your credit card debt.

Focus. Set your Mind into Debt Freedom
You need to set a goal and let that inspire you to act. Remember that a goal consists of an end result and a timeline. In this case, your goal is to completely pay off your debt. What you need to identify is the time you want that to happen. Write it down and put it somewhere you can see everyday. This will guide you to the right direction.

Create a Plan
You can avail of debt transfers that most credit card companies offer. Try your best to transfer your debt from high interest card to a lower one. Having a consolidated debt can help you develop a nice plan.

If you have a very large balance, it would also help if you set smaller objectives. That is, given the goal that you have set, create smaller periods of time and assign a particular milestone. Say, if you plan to pay off a $5K debt in a year, you need to pay $420 in a month. If you have missed that milestone, then you have to note it and include in your next months goal. This is just an illustration. You can devise a better plan that suits your financial condition.

Stop Using Your Card
You don’t want to add more to your current debt, do you? This is one of the basics. Keep your card away from you. Leave it when you go out, even if your purpose is just to wander around. You never know when temptation strikes.

Discipline Yourself
At this point, you should know the things that you need versus the things that you want. Given that you are in debt, spend only on your necessities. Monitor your expenses and try to eliminate those that you spend on useless items. The more money you can get from these to pay off your debt, the better.

Credit card debt is a common problem among people, and reducing that credit card debt or completely paying it off is just a problem to most card holders. Many people will want to reduce their credit card debt as quickly as possible. To do this, others seek the help of their friends and relatives and some even consult professional financial advisers (creating another expense in the process).

How to Reduce Credit Card Debt

Here are some tips to help reduce your credit card debt.

Hide Your Card – STOP using it

The first step in reducing credit card debt is to stop using it. You can’t reduce your debt if you keep piling up balance every time you buy an item or avail of a service. Do not carry it whenever you go out to shop or stroll because the temptation of using is always there. Leave at home. If possible, you can request your trusted friend or relative to keep it for you, in a place that you don’t know. This will help you buy things that you can with your cash or debit card.

Pay Balance Regularly

Whenever you receive your income, you pay. Set aside what you need, and use the remaining to pay your debt. At this time, saving is not a priority especially if your financial liability is very high. Remember that interest rates are high, so you need to pay your debt as quickly as possible.

Monitor Your Expenses

With your card hidden, you are supposed to be using whatever cash you have in hand. With that, you need to log every expense you make and try to identify something that you can eliminate. An example would be a daily coffee from Starbucks. You can sacrifice some days not buying that latte and have a free or cheaper one in your office’s pantry. You can even bring an instant coffee powder with you and all you need is hot water. The point is, from your list of expenses, you can be creative enough to save a dollar or two a day, and that money can be used to help you pay your credit card bill.

Impose Discipline – Know Your Needs and Wants

It’s unfortunate that many card holders don’t know the difference between their needs and their wants. Many of us (yes, including me), buy on impulse, stating words like ‘I need this because…’ or ‘This sale is once-in-a-lifetime opportunity, I need to buy this…”.

Personally, what I did was to assess my bills, listed all the items that I bought using the card, and then check where these things are. Sad to say, almost 50% of them are just kept inside the closet or are plainly unused for months, mostly clothes and gadgets. In fact, I only used these things a few times or just for a short period of time.

The key here is to do the assessment before buying an item using your card. The convenience is tempting, but you really need to think – twice or thrice if possible. Understand what you really need and prioritize.