How to pull yourself out from credit card debt quicksand

Credit card is a finance tools that become part of everyday urban life.

Firstly, it is a necessity to replace the inconveniences of carrying large amount of cash. Secondly, it will give you a flexible cash advanced during emergency : to pay bills(e.g. hospital deposits as required by some medical center) during odd hours. Thirdly, it can serve as an online purchase anti-fraud tools : should the merchant fail to delivered, the credit card company can deferred the payment.

The unseen Credit card debts interest rates quicksand

But the high monthly interest associate with credit card make it an double edge sword. The cumulative credit card interest can go as high as 18% to 24% per annum. This mean if you fail to settle the credit card loan in the shortest possible period, if extend to 1 year period you will end up paying $180 to $240 out of the $1000 your credit card spending spend.

Most banker allow the credit card holder to pay a minimum monthly payment . The credit card holder should not take it as granted. Because paying the minimum monthly payment will do no good to your finance in long terms, because the cumulative compound interest can burn a hole in your pocket. A calculation has show that, if a card holder paying $50 for $1000 credit card debt, with monthly interest rates 1.5%, it required the card holder 24 months (2 years) to clear off the debts. And the accumulated interest rates goes as high as $176. This mean ever $100 you pay, $17.60 are the interest fees.

$176 sounds little over 24 months, however, it is 3 to 5 times higher than the bank fix deposit rates. In addition, with recurring expenses accumulate on top of the current debts, it can be a huge burden to the card holder.

The card holder must take appropriate approach for Credit card debt consolidation to regain control of their money.

How to consolidate your credit card debts in a proper way

Before approach local credit card debt consolidation agency such as New Jersey credit card debt consolidation, New Jersey credit card debt consolidation , it is highly recommended the card holder do their homeworks first.

Open a spreasheet or write down the following item in a booklet.

Write down incomes
1. Monthly incomes

Write down the expenses
1. Monthly utilities bills to pay
2. Loan to repay
3. Personnel expenses
4. Dependent expenses

Write down the credit card debts
1. Write down how much you owe the credit card company
2. Write down the monthly interest rates

Now put all the figures into a tables with the following columns.

Write down the figures for 12 months, 24 months and 36 months.

With this information on hand, card holder may contact Credit card debt consolidation agency to negotiate the best interest rates that cover current credit card debts.

Month Income Expenses Credit Card debt Interest Fees
1
2
3
…..11
12

If card holders utilize the credit card consolidation facility properly, they will find out besides saving from tens to hundreds dollar of credit card interest fees annually, they will regain control of their financial status. As long as the card holder take discipline not accumulate new credit card debts, they will be out of the credit card debt quicksand within few years.

Although this is a sponsored post , I hope my articles is helpful to those who are looking for a solution for their credit card debts.

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