How to Get Out of Credit Card Debt

Americans owe more than $1 trillion in credit card debt and it’s growing at an alarming rate. It adds up to a lot of interest payments, as well as countless sleepless nights.

If you’re one of the millions of consumers grappling with growing debts, there is some help on the horizon.

In this guide, we’ll look at some of the best ways to escape credit card debt without leaving your credit score in tatters.

1. Get Help from the Experts

Credit counselors are always on hand to help you with your debts, and if you stick with reputable companies, you won’t be charged an extortionate amount for their services. In fact, the best companies offer free consultations in the first instance and promise to help you find the solutions you’re looking for.

Such is the case with Health Insurance Hero, a referral company that connects callers to one of its trusted providers and ensues they find the best service for their needs.

Health Insurance Hero was founded to help Americans deal with the stress of debt and credit issues.As its name suggests, it was founded primarily to help people pay less on their health insurance policies, but after realizing that many of its customers were also struggling with debt and credit issues,it soon branched out.

It’s all closely linked, as it’s all geared toward saving you money and making your life easier.

To start your journey and get a personalized referral, visit Health Insurance Hero today. Health Insurance Hero offers all customers a free consultation and is available throughout the day.

2. Increase Your Payments

Credit card interest accumulates at an alarming rate. The higher your balance, the more you will pay,and most of your monthly payment goes toward the interest, with very little reserved for the principal.

If you’re paying $400 a month and $300 of that is lost on interest, increasing your payment by just 25% will double your total principal payments. You’ll clear your debt in half the time and pay much less in total interest.

Always try to pay a little extra, even if it’s just $50 or $100. You’d be surprised at just how much of a difference it makes.

3. Use a Balance Transfer

Debt consolidation is the easiest way to reduce your total interest payments, and if most of those debts are tied into credit cards, a balance transfer card is the perfect solution.

These cards function just like any other credit card, only they have an introductory interest-free period that applies to all transferred balances.

You will be charged an initial 3% to 5% fee when you transfer your balances across, but you’ll save much more than you spend.

For example, if you have three credit cards each costing $200 a month on balances of $5,000 each,you can transfer all $15,000 to a new card, pay just $450 to $750, and then focus on reducing that $15,000 balance.

If you continue making the same monthly payments of $600, you will have reduced your balance by $6,000 after 12 months and $9,000 after 18 months, leaving you with a much smaller balance to clear once that introductory period ends.

To get the most out of a balance transfer card, you need to go all-out during that introductory period and clear the balance before it ends.

4. Contact Your Creditors

If you’re struggling to meet your payment obligations, contact your creditors and discuss your options.They might be willing to reduce your rates or enter you into their hardship program.

Borrowers often assume that their creditors don’t care and will do what they can to make their life difficult. But that’s simply not the case. They want you to repay as much of the debt as possible and if they can get some interest out of it, that’s a bonus.

They know that making life difficult for you will cause you to default, at which point they’ll need to sell the debt to collection agencies or give up on it entirely. If they can make a few changes to reduce the odds of this happening, they will.

It’s a win-win.

So, don’t be afraid to contact your creditors if you’re struggling. If that fails, give Health Insurance Hero a call instead.

5. Consider Last Ditch Options

If all else fails, it’s time to consider debt settlement and bankruptcy.

With debt settlement, you need to intentionally miss your monthly payments and move the money to a secure account. A debt settlement expert will wait until your creditors have all but given up, at which point they’ll use those funds to make a settlement offer.

It’s one of the cheapest ways to clear your debts and works incredibly well for credit card debts, but it can do some serious damage to your credit score before then.

As for bankruptcy, it clears all unsecured debts, including credit cards. However, it’s not free, it’s not easy, and it leaves a mark that could remain for up to 10 years.

Both options have their pros and cons, and these are something that an expert can advise you on.

Barbara C.
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