Millions of consumers are still working hard to get out from under the financial burdens they faced, often through no fault of their own, throughout the recession and the years following. But there should be a bit of strategy applied when attempting to get out of significant credit card debt.
Many consumers still have significant balances on their credit cards and are now looking to reduce them in relatively short periods of time. While it is certainly possible to do so, it also takes careful consideration and dedication to effectively reduce credit card debt to manageable levels.
Perhaps the easiest way to do so is for consumers to take a close look at all aspects of their finances. This should include first doing a check of their Credit Report Card, which can identify why their score has been hurt in the past. The second step is examining how much they pay for everything in their lives and seeing if they are able to reduce their obligations in a number of ways so that they have more money to contribute to their credit card bills at the end of every month. Of course, this should also be done while keeping in mind how quickly they would like to be out from under those debt burdens, because this will will significantly impact how much needs to be freed up from other areas.
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It may also be a good idea to start seeking out new credit card deals, particularly for those who have a strong credit rating already as a result of careful management of their accounts in the past. In many cases, it may be possible for borrowers with good scores to find a deal that comes with an introductory interest rate as low as 0 percent for as long as 24 months, which can be extremely helpful in reducing the balances they carry on other cards without adding any more interest charges. However, those seeking this kind of deal should also expect to pay the 3 percent balance transfer fee that comes with most of these accounts.
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Further, consumers should also make sure they do not add to their balances with any additional spending when they get a balance transfer card. That’s because these transactions likely come with the account’s standard interest rate, which will typically be somewhat elevated from normal credit cards. Balance transfer cards should only be used to reduce debt during the introductory period.
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