Credit card debt management-Ways to tackle credit card bills

Credit cards can work as the best short term loan for you, if used responsibly. But when you do not make monthly payments, your debt gets accumulated to a huge amount and it becomes difficult for you to repay the dues. So, if you think you'll be neck deep in debt just because you may not be able to keep up with the payments, explore various ways to pay off the money you owe. With proper planning, discipline and dedication, you can free yourself from your dues.

How to handle credit card debt

You can handle your credit card (cc) dues in two ways. Either you can do it yourself or take professional help in managing your bills.

1. Handing dues yourself - Handling your dues yourself can be very helpful as it can save you a lot of money. You can negotiate with creditors and gain the following benefits.
   
   • Better interest rate – You can get a better interest rate on your debt by negotiating with the creditor. You can inform him that you're getting lower rates from his competitors, and are repaying those dues with ease. Thus, to recover the money he has offered you, the creditor may lower the interest rate, thereby reducing your monthly payments.
   • Suspended monthly payments – If you are unable to pay the minimum monthly payments on your bills, you can talk about this with your cc company. They can liberate you from the problem of monthly payments for 2-3 months, that is they may offer you a "payment holiday".
   • Removal of extra fees – You can negotiate to remove late fees, finance charges and over-the-limit fees from your account. These three things amount to 30-40 percent of your total balance and you can save a lot of money here.
   • Reduction in total bill amount – You can discuss with the cc company regarding the reduction in your outstanding balance. You can pay the company a lump sum amount and clear dues without any hassle.

You should keep a lot of things in mind while trying to handle your dues yourself. Prepare yourself well before meeting the creditor and always keep proper record of all your conversations with him. You should always get a written agreement from creditors about all the settlements made. It is very important to know about various consumer rights to save yourself from any harassment by collectors.

2. Debt elimination programs – If you think you cannot eliminate dues yourself, then consult a debt relief company who can help you in paying off bills. There are several debt elimination programs available to free you from the burden of higher monthly payments. Some of them are given below.
   
   • Debt consolidation – In a consolidation program, you can take help from a consolidation company. The company will handle calls from your creditors and negotiate with them to reduce your payments. You will send your monthly payments to the consolidation company and they'll distribute it amongst your creditors. Thus you consolidate all your bills into one monthly payment without having to deal with several creditors.
   • Debt management – If you can no longer afford your minimum monthly payments, you can take help of a debt management program. Here a credit counseling agency negotiates with the creditors to reduce the amount of your monthly payments so that you don't default on your accounts. The cc company lowers your rate of interest on the bills and also waives off late fees. Thus, you can pay off your dues faster.
   • Debt settlement – You can go to a settlement company to settle all your dues with ease. Herein, you'll have to stop making any payments to your cc company. In the mean time, the settlement company negotiates with the company to write-off 40-60% of your dues. All you have to do is deposit a specific amount every month into your savings account. Once you accumulate a good amount in the account, your settlement company negotiates with the creditor to reduce the balance you owe and accept the lump sum amount you deposited into the savings account.

4 Tips to pay off credit cards

Getting rid of cc bills can be very demanding but with a clear focus and confidence in yourself, you can do it. Given below are some tips to repay the dues.

1. Stop using credit cards – This might seem very difficult, especially if you use it for your daily requirements. But if you want to pay your bills with ease, you'll have to stop using the cards.
2. Pay the maximum you can – If you keep paying the minimum required amount to your cc company each month, your balance will keep increasing. So, every month, try making extra payments on your bills.
3. Stop using multiple cards - If you use a number of cards at a time, your balance will keep increasing on each card which you'll find very difficult to repay. Paying off the debt on one card is easier than that on many cards.
4. Set financial goals – To keep yourself focused in the right direction, it is very important to set targets and goals. You should also set a date to reach your goals and measure your progress.

It is very important to decide how you want to eliminate debt. Handling debt yourself has its advantages and debt relief programs are also good. But only you can decide which will work the best for you. So make the correct decision and follow all the tips to come out of debt trap faster.