Practical Debt Solutions

Being in debt may be an embarrassing thing but the reality is majority of the people you know may be in the same situation. People can get used to a certain degree of comfort that they fail to realize that they are already amassing huge credit card debt.

Credit cards were designed to make life easier. We can carry this little piece of plastic and purchase whatever we need, whenever we need it. We can use it to pay for cash, to buy food, to shop for clothes and even pay for your children's tuition fees! However, it has also been created by some who want to see profit from this piece of plastic convenience.

Most of us fall into this trap and admitting it's a problem is better than covering it up by purchasing more things and sinking deeper.

One debt solution is to pay more than the minimum amount due each month. This is usually the trap that is being set up for unsuspecting consumers - very low minimum dues. Increase your payments to 3% to 5% each month. However, be realistic about this. If you can't afford it, a 2% to 3% increase would do. Review your credit cards. The idea is to pay off the credit card debt with the highest interest to prevent the interest from stacking up.

Other credit card companies lure customers to their service by offering low interest rates for credit balance transfers. Some companies offer interest rates for as low as 5% which could mean a lot to the 22% you were paying previously. But read their terms of agreement carefully because their might be a catch somewhere such as a greatly increased APR by the next year.

Just to get out of debt, try borrowing from your friends and family. This may be a blow to your ego but this would be better than having to ask them for a place to stay later on when your house is foreclosed. Your parents could give you a much lower interest or better yet, no interest at all. You could also talk to your bank and negotiate for a settlement. Some credit card companies actually welcome this as a debt solution versus not recovering the debt.

Non-profit organizations also help people renegotiate interest rates or give them advice for debt solution. They may refer you to debt consolidation just to give you some breathing room. But be careful though because this requires collateral to be put up in exchange for smaller monthly amounts to pay for all your consolidated debts. Whatever solution you choose, make sure it helps you solve your debt problems.


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