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6 Tactics to get out of credit card debt

By Charles Hopkins Published 11/27/2007 | Finance
Getting out of credit card debt takes perseverance and willingness to succeed. So whether or not you are being swallowed by the sink hole of credit card debt or you are just starting out to dig yourself into credit card debt - you have to make some decisions before it's too late.

The six tactics listed below will help you get out of credit card debt.

1. Stop using your credit cards - Leave your credit cards at home. Did you know that by using your credit cards you are paying additional interest on the credit card balance you owe on which you've already been charged interest. Unless you pay the new charges when you are billed you are accumulating additional interest on both present and past charges.

2. Determine how much credit card debt is costing you. How? you may ask! You can determine how much credit card debt is costing you by seeing how much interest rate you have to pay. This is done by reading the fine print on your latest credit card statement. If you do not understand then you call your credit card company and have them explain it to you. By law they have to explain it to you.

3. Lower the interest rate you are currently paying on your credit cards. Lowering the interest rate you are currently paying is the most effective and easiest way to get your credit card debt situation better. You can lower the interest rate you are paying by transferring high interest rate amount balances to lower or no interest rate companies. Once you've stopped using your credit card you've stopped your situation from getting worst, it's now time for you to improve it.

4. Ask your credit card companies to lower your interest rates. Since you already know the interest rates it is time for you to ask your banks and credit card companies to lower the interest rates. You should call them and ask to speak with a supervisor. The supervisor has the authority to give you a lower interest rate.

You should tell them the rates are too high and you want it lowered. And also let them know that if they are not willing to lower your interest rate you are considering to close your account and transfer all your credit card balances to the company that is willing to give you the lowest interest rate.

5. Consolidate your credit card debts. By consolidating your credit card debts - transferring all credit card balances to one credit card - is an effective way of getting out of credit card debts. So when negotiating to get a lower interest rate you should let it be known that your ultimate goal is to get out of credit card debt at the lowest possible cost and not credit card shuffling.

6. Cut your savings in half. It would be foolish to be paying high interest rates while continuing to save the usual amount, if you are indeed saving. If you are already so deep in debt that no one company is willing to loan you the money to consolidate your credit card debts then you would have to resort to this tactics.

It works like this. Get all your credit card balances. Divide each balance by the minimum amount you are required to pay each month. This tells you how long it would take to pay off each balance. Start by paying off the one that takes the least amount of time (half your savings minimum payment). Continue making minimum payments on the rest. When that least payment is finished you would pay the next least payment and so on. You would continue using this tactics until you are no longer in debt.

If you follow the above tactics you should be on your way to getting out credit card debts and start building wealth for your future.