Credit Card Debt Reduction

 In these tough economic times people are finding themselves in excessive credit card debt.  Some people have simply overspent, but many are using credit cards to survive during a job loss or injury.  Surviving on a credit card is the last resort for many people and once they finally get back on their feet the credit card debt seems almost unbearable.

All is not lost as there are several ways to reduce credit card debt, consolidate debt, and negotiate debt into a lump sum settlement.

The first method to get out of credit card debt is by reducing it. According to credit repair techniques and credit repair sample letters, there are some tricks of the trade to reducing your debt. The first thing is to know that the credit bureaus like your debt balance to be at 30% of your limit. This means you either need to pay down your balance or simply call your credit card company and raise your limit. Staying within this ratio will raise your credit score which will in turn help you to qualify for many other debt reduction options.

With credit card debt, principle payments are the name of the game. Don't ever just settle for the minimum payment given to you by the credit card company. These payments are designed to keep your credit history good, but are also designed to keep you paying the credit card company as long as possible. Always try to make a little big bigger payment than the minimum so you can start paying down the principle amount.  This will shorten the time you will have to pay the credit card companies AND it will start lowering your monthly payment.

Credit card debt consolidation works differently than just paying down your principle.  This usually is a new loan that in a sense refinances your current credit card debts.  The trick here is that you usually need a good credit score to qualify.  Like i mentioned previously if you can stay within the 30% ratio of your debt balance to the limit, this will help raise your score by 30-60 points!  This may just be enough to help you qualify for a new loan.  A consolidation loan is great because it wraps up all the debt and then gives you a much much lower interest rate and usually is termed for 5 years.  A loan like this will considerable lower your monthly payment and help you pay off your debt much faster.

Debt settlement negotiation is another option.  This is usually a last resort and is something you should do if you are considering declaring bankruptcy.  Often your credit is shot, you can't make your payments, and you financial world is spinning out of control.  Instead of filing bankruptcy you can negotiate with these creditors through a third party and sometimes settle on your credit card debt.  Some settlements end up being up to 50% of what your original credit card debt was.  Usually these negotiations will lower your interest rate and pretty much give you a consolidation loan based on the new amount to still receive some money from you.

 Once you find a solution to getting your credit card debt lowered, there are still opportunities for you to use your purchasing power.  Did you know there are mortgage loan programs available to people with bad credit?  These loan programs work with people that have less than perfect credit scores.  The thing to remember is that your debt to income ratio is very important.  If you have too much debt you will not qualify.  That is why it is so important to use the techniques above to get a handle on your ratios so that you can still have some buying power to take care of essential possessions like a car or home. 

Credit card debt reduction is a plan and may take some time.  There is no such thing as an overnight quick fix for debt, except of course if you win the lottery.  A lot of people are in the same boat so don't feel singled out.  Take the bull by it's horns and start making a positive change in your life today by using these credit card debt reduction techniques.

 Remember that credit card companies as bad as they may seem still lent you the money that you used.  It's only fair that they get the money back, or some of the money back instead of nothing.  Please seek out credit counseling or debt negotiation companies to see if you can aleviate your debt and make things easier before just automatically turning to bankruptcy.  It will be better for your credit if you can fix things with the credit card companies instead of declaring a BK.  Remember that BK's stay on your credit for up to 10 years!