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Not only can credit card debt impact your emotional and psychological state but numerous studies have shown that people that carry debt tend to be worse off than those that don’t. Carrying revolving debt can be a malicious and repetitive cycle. It can prevent you from living life to your fullest and growing. One of the main reasons people acquire credit card debt is due to a change in expenses or a change in income. Once you accrue a significant amount of high interest debt it becomes hard to not feel trapped in a never-ending cycle of making unimpactful minimum payments. Even worse, if you continue to use the credit cards, any payments you make on the debt will eliminate your chances of making progress on the principal amount owed.

Paying your minimums might seem like an effective way to avoid the problem at hand, but it is not! Due to the effect of compounding interest, credit card debt tends to rise like yeast. Despite all of this, there are ways to reduce or even get rid of all your credit card debt through a debt relief program. Along with assistance from a debt relief company, below are some tips to help guide you towards debt freedom. Follow these five tips:

  1. Stop Using Your Credit Cards

Even if you have a significant amount of credit availability, it is better to not use your credit cards if you wish to make progress on your debt. If you continue to make charges with your credit cards you will surely just prolong your cycle of debt repayment. If you must still use a credit card, make sure you are paying the balance off at the end of the month and not accruing any interest charges. This way you are free to focus on the other accounts with significant balances and can better manage your credit card balances. Using the credit card with the lowest interest rate and least amount of associated fees is always preferable. Although it’s better to use none will you try repaying everything, if you’re using only one card it possible to control your expenses and interest rate.

  1. Do Not Let the Debt Continue to Increase

Continuing to pay "what you can" is not always your best option. If you are paying well above the minimum payment amount and still not making progress, then you should get credit card debt help. Many people continue to make charges on their cards while paying down the debt aggressively, but the issue still persists. The reason being, if you are still using the credit cards and have 20%+ APR’s, anything above the minimum you pay will just go towards interest. Moreover, any additional charges you make on the credit cards will just compound and generate more interest to pay down the line. This is why it is crucial you stop using the credit cards so you can focus on paying them off. If you can do that, pay more than the minimum payment and the debt will be eliminated sooner rather than later. The most important thing is that you stop your balances from continuing to accrue high interest charges.  

  1. Negotiate a Refinance

It is always advisable that you request a better interest rate or APR whenever possible. Before you begin this process, it is essential that you put all your debt accounts on an excel sheet and the associated APR for each account. Once you’ve done that, tally up your debt total and attempt to pay down the higher interest and lower balance accounts first. From then on you can analyze and compare different alternatives to cancel the debt. Some other options may be refinancing through the bank issuer (create an installment plan to pay the balance with your banks) and the last option, obtain a debt consolidation loan. By consolidating you debts you may be able to combine everything with one lower APR loan. However, it is often very difficult to qualify for a debt consolidation loan if you have a significant amount of debt. A partial consolidation will not be much help, so if go this route make sure it covers all your debts, so you can gain a foothold on your debt once and for all. Otherwise, you would be better of negotiating the debt on your own via comfortable installments. This option, although feasible, is not the most advisable, of course, since you are essentially robbing Peter to pay Paul. Taking on more debt to pay other debts does not usually help much, it simply generates a new problem that you will have to solve somewhere else down the line. If you go this route make sure you are able to manage it as it can lead you to a vicious cycle of getting back into more debt. For more help check the Consumerfinance.gov guide on an effective way to cut down and negotiate on your interest rates.

  1. Set a Goal and Time Frame for Repayment

In order to make progress on your debt it is best to set a conservative goal and time for which you wish to complete repayment of your debts. Your goal should be to pay back your credit card debt as aggressively as possible. The best way to go about this is by writing down everything in paper. When you write things down they become more tangible and will therefore help you realize your goals. Additionally, it is always best to be conservative in your goal setting, so that you can surpass your goals. This may sound like a simple and easy tip but it is one of the most important ones from this list!

  1. Learn from Your Mistakes

Life happens. It is understandable to use credit card debt as a backup plan under excruciating circumstances but do not repeat the same mistakes over and over again and expect different results! If you don’t adjust your finance strategy or make any changes in spending behavior things will likely remain the same. Pertaining to personal finance, it is always best to prioritize your purchases and refrain from accumulating debt whenever possible. Finally, Bankrate.com has a great credit card repayment calculator which helps put into perspective how much money you have going out towards interest each month. If anything, it will help motivate you to take a stand and help you better manage your credit cards.

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