Erase Credit Card Debt Starting Now

Do you dread getting the mail? Are bills piling up? With the state of the economy, many people are exploring their options for erasing credit card debt. Should you consider debt consolidation? Bankruptcy? A loan against your house? Let’s examine the options available to help you get a hold of your finances.

First, there are no fast solutions. Lots of websites out there will offer what seem like easy solutions, but you will get out of debt in about the same amount of time you spent getting into debt. The myths that credit card debt is illegal or that the credit card company is actually liable for the debt are just that: myths. You spent the money; you have the stuff you bought on credit. It is your debt. Once you look that fact in the eye, you can move on to really erasing the debt.

Debt consolidation is an option. The way debt consolidation works and the theory behind it is that with one payment at a (hopefully) lower interest rate, you will have the discipline to pay off the debt, step by step. There are good, reputable debt reduction companies and that is the key to using this method for debt elimination. First, you have to make sure that the company is not simply going to start paperwork for bankruptcy for you. Many consolidators are simply in the business of helping you declare bankruptcy and part of the work they do for you is to negotiate your debt down to pennies on the dollar. It sounds great when you read that they will “reduce your debt by 70%.” But as with so much in life, if it seems too good to be true, it is too good to be true.

Bankruptcy is also an option. It is not a great option, but it is there for you. There are two types of bankruptcy. Chapter 7, also known as total bankruptcy, stays on your credit report for10 years. Chapter 13 is more like a debt consolidation payment plan, and it stays on your credit report for 7 years. Bankruptcy is appealing — we want to go to sleep and wake up with a problem solved. The first problem is that when you wake up, you’re still you, with the same habits and thought patterns. The second problem is that the bankruptcy process is not simple or easy. It will wreck your life. If you truly see no other alternative, get a lawyer who specializes in bankruptcy.

Borrowing against your home to pay off debt is not an option. Nor is borrowing against your 401k. What you are doing if you take one of these two options is taking away from your future to pay for your past. If you are seriously considering either as a solution, do this first: pull out your credit card bills and try to write down what you bought with the credit cards. Can you do it?

Are you serious about erasing credit card debt? Then start with this: cut up your credit cards. You need to draw a line in the sand. Today is the day you start getting out of debt. Not tomorrow, not next week, today. Next, take a hard look at your expenses.

Where are you spending money needlessly? Do you have to have Starbucks every day? Could you bring your lunch twice a week? If you can make some small adjustments to your day to day living, it will start to have a big impact on your finances.

Take a look at your bills and sort them from smallest to largest. Don’t get caught up in the interest rate. What you want is a quick victory. What is the smallest bill? Can you add even $15 to the payment on it? If you ate out for dinner one less time each month, could you add another $60 to that payment?

You can erase credit card debt, and you can start right now. I know what I’m talking about. I’ve paid off $30,000 in credit card debt and I did it the only way you truly can: dollar by dollar by dollar.

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