Everyone goes through bad financial phase at some point of time. In a credit driven and capitalistic economy, bad financial phase means landing in credit card debts. Credit card debts are detrimental to good credit
history and having a bad credit history can give you some unwanted problems like dealing with credit check for everything, in future. Credit card debt is not so much of a problem if dealt properly at the initial stages. The more you accumulate debts on the credit card, the more interest rates you pay, and clearing the actual debt amount becomes difficult. This is the situation which most credit card companies cash-in on. There are a few ways to pay off your credit card debt as early as possible.
Loan Borrowing options:
Normally, credit card companies charge an interest rate of at least 18% to 20% on your total outstanding balance. Which means, if your outstanding balance in anywhere around $5000, then your interest rate alone can be anywhere between $900 to $1000. If you can pay $1000 every month towards the credit card, then that will go towards your interest rates alone and your outstanding balance will remain untouched.
One way to deal with it is borrowing a loan elsewhere, with a lower interest rate and clearing off the credit card debt. Lower interest rates are much easier to handle and takes less repayment time. You can borrow money upon your life insurance policy, at much lower interests and a longer repayment period. You can also try borrowing upon your retirement benefits, that is the 401K, but the only disadvantage here is that repayment period is typically until you are employed in the company. You can borrow up to 50% of the total retirement benefit you are entitled to, or $50000, whichever is the lower amount. If you decide to do this, be sure not to jump jobs without repaying this loan first, otherwise, it will be payable immediately after you resign and the interest rates will be much higher than the commercial rates.
Dealing with multiple credit cards:
If you have more than two credit cards
and have accumulated debt on each one of them, then clearing off the debt on all three together can be challenging. Shift your focus to one card at a time. Try balance transfers, as your loan will be practically interest free for at least a period of six months to one year, depending on the credit card company. If you don't want to go with this, then pay off the minimum amount due on each card and pay off the full amount due on one card every month. After you are done with the card, do the same for the next card in line. During this loan repayment time, forbid yourself from making any purchases with the credit card. Otherwise, loan amount will keep accumulating and repayment becomes almost impossible. Do not miss the minimum due amount on all your cards if you are paying full amount for just one card, otherwise it can get your credit scores to go negative.