Paying off credit card debt-What's the best option?

I had lost my job last year. I've been putting off credit card payments even though I had a job. I realized that it was really irresponsible. I have a lot of debt from the last 2-3 years. And My credit card expired last month. Now I am unemployed and I am anxious for my credit card debt. What is the best way/option to pay off my credit card debt?

 

Contact the CC companies involved and work out a payment plan.

 

Find a job or part-time job as fast as possible. Use your mountain of debt to motivate yourself to find work.

 

Find your highest interest credit card and work on paying it off first. If you only have one credit card, you're in a lot better shoes than many Americans. What you want to do is pay a little bit over the bottom line payment. For example, if the bill says $200.00, you pay $210.00 which would put $10.00 on principle. Then you continue to pay $210.00 each month after that. What happens is as the balance lowers, the minimum they ask you to pay gets lower and you are putting more on principle. So when they are asking you to only pay $100 and you're still pay $210.00, you're knocking huge chunks off of the overall balance.

Unless you want to pay for 30 years on the credit card this is about the only way to do it.

 

Do part-time job to settle your credit card debt mate...

 

well, of course, first of all, get a job, get some income coming in... then I'd do as the first response says, contact the companies directly. Depending on how long you've had the debts, maybe some companies have changed hands, documents/files lost and might settle for less. Some of them just want to get you off of their books.....

 

Some things you just can not control...If you are out of a job, I surely would not worry about your debt, and I would not
worry about calling them, your debt is just not going to care about your problems, and the more you talk to them, the
worse it could be for you if one day you try to get out of the debt ie: BK...It is not like they are going to come in
the middle of the night and chop off your head....you have more things to worry about, and debt that you can not
pay is not one of them at this time...work on getting yourself back on your feet, and deal with debt when you are
more able to deal with debt....and I surely would not loose any sleep over what you can not control.

even though this is not the appropriate forum for your post, maybe you should look for some
credit forum, ie: bkforum.com - talk to those that have more experience on the matter.

 

Gosh. That's terrible advice. If you don't contact the creditors you have no chance of having the interest frozen. All that will happen is they will pile on interest charges and administrative charges, then legal fees. All that can double or treble the debt.

A repayment plan has to be workable. Credit card companies know this and they know there's no point trying to get you to pay $$$ when all you have at your disposal is $$.

 

Step 1: Contact every single credit card you have and tell them you're in a hardship. Ask them what the best offer they can make you is. Most companies will give you a solid break.
Step 2: Focus as best as you can on not wasting any time by getting cash anywhere and anyway you can
Step 3: Save, Save, Save on every purchase and try to live really minimally
Step 4: After they give you their best options, figure out which card is costing you the most in interest every month. Focus on that card until any other card becomes more and focus on that one and keep going back and forth as much as needed to make sure you're always focusing on paying off the worst card.

Just do those to the best of your abilities, because if that doesn't work, bankruptcy will probably be the only option. Best of luck!

 

The Debt Snowball by Dave Ramsey is a good method. Even though I made very good money, I am considering making some drastic/radical moves to reduce debt.
-Sell my car & take the train to work.
-Cancel any reoccurring payments (gym, insurance, whatever).
-Save 25% of my income, put 25% toward debt and use the rest for life (you don't want to get too down and feel like there no is no end in sight, so save while reducing debt).

All the best luck.

 

I agree with McFox...Contact the credit card companies and negotiate a better interest rate and work out a payment plan. Once they lower the interest rates , try to make minimum payments.

Avoid Bankruptcy unless you have more that $50,000 and the credit card companies wont work with you. But again thats up to you.

Bankruptcies are HORRIBLE and will hurt you for 7-10 years so try to avoid that.

Don't get upset if it takes a while to pay it off. Do the best you can and overtime it will get better. ALso be sure to CUT your card in half. Make cut backs. For example if you have a cell phone, either cut it way back or eliminate it... Start eliminating things you can live without.

You know you cant live with out food and water. Obviously a place to live is a high priority as well.

Good luck!

 

Hi I've been in your shoes back than I was a student. To work out a payment plan with your creditor you must first have a J.O.B. Working on a payment plan without a job just doesn't make sound advise. Yes you have interest piling on that debt daily but your first quest should be finding steady work to have a paycheck in order to pay off the debt. After you have found a job continue paying your regular bills like rent (if you don't own) & utilities. These bills will help build some creditability but not much. $10 plus whatever the minimum payment is is not going to have any affect on reducing the principal + interest of your debt. You have to tackle the built up interest over the past year which you've been neglecting to pay when you had a job. This is understandable sometimes we let things slip until they get out of our control. Your objective how is to regain control of your personal finances.

To tackle you're cc debt you're going to have to tackle the unpaid interest first once you get the interest out of the way you can start tackling the principal. When you find a job start paying on the debt immediately before your creditor passes the debt off to a collector. Try to negotiate an afford payment plan with your creditor to reduce your debt. When you get your tax return and if you don't owe anything to IRS take this lump sum money to further reduce you debt and continue making the payments you and your creditor agreed on until the debt is paid off. Whatever you do DO NOT MISS payment you negotiated with your creditor after you've found a job of course otherwise you'll be setting yourself 5 steps back instead of 10 paces forward to getting your debt paid off quickly.

 

there are many companies offering a sevice that they will cut 50% of your unsecured debt like from credit cards for a 10% commision

 

Sit down with your latest credit card bill. Take note of the total amount owed. Next, find out the yearly interest rate you are paying on the amount owed, like:
$10,000 owed multipled with 17.89% yearly interest =
10000 x 0.1789 = $1789 is the total per year in just interest.

So now, for the debt to not get any bigger, cut the cards in half. Only deal with cash from now on.
Also, take the $1789 divide it over 12 months, = $149.10.
This means that each month you need to pay at least $149.10 just to keep your debt at the current level. For it to go down, you need to step up and pay off more.

The tougher you pay down now in the beginning, the lower the interest amount next month will be (because the base you are multiplying with gets less) and this will free up cash to pay down even heavier.

So best shot is to more or less cut down on everything you can, live extremely cheap 6 months and just focus on getting a job and paying down the debt.

 

if the situation is completely hopeless, you might try bankruptcy. Otherwise, work out a payment plan with the CC companies. Failing that, pay down the highest interest rate cards first.

 

First you need to make some major lifestyle changes. First and foremost you need to find a source of income. I don't know your exact situation, but I would say that would be your first step. Next, contact a credit counseling company to see how they can help you with your payments monthly. They will deal with the credit card companies directly, so you don't have to. They have pre-negotiated agreements with them, so you can get lower interest rates. Lower interest rates means your money is going straight toward paying off your debt instead of throwing it away on interest.

Good luck!

 

I agree. Dave Ramsey's Baby Steps are awesome!