Dealing with a mound of credit card debt can be stressful and aggravating, as the negative impact on your credit score is constantly there to remind you of the burden that’s weighing down on your finances and quality of life. Fortunately, if you’re making a genuine effort to decrease your credit card debts then you’re already on the path to success – it’s just a matter of following through. Also, it would help to devise a step-by-step approach. With that said, anyone with significant credit card debt should consider taking the following measures initially:
1. Create a Debt Management Plan
Like anything else that’s challenging in life, winning the fight against credit card debt is going to require a game plan. A debt management plan (DMP) is a comprehensive strategy designed with the assistance of debt management companies that will simplify and streamline the gradual yet reliable repayment of delinquent debts. Although a DMP can be developed to encompass all of a person’s debts, they can also be used to combat specific kinds of debts (i.e. credit card debts) on a more focused basis.
2. Consider a Debt Consolidation Loan
Consolidation loans are sometimes presented as an option within the course of a DMP, as they’re ideal for centralising a large number of debts into a single, more manageable repayment. Although the interest rates may be higher than your average loan, you get the benefit of having all your existing debts paid off and removed from your credit report. However, it’s imperative that you stay up-to-date on your consolidation loan repayments or you’ll find yourself right back at square one.
3. File Disputes
Filing disputes are one of the fastest and easiest ways to have items taken off your credit report. Of course, you’ll need a legitimate reason as to why the item should not be on your report, but this step is worth noting in the event that some of your credit card debts exist due to inaccurate or fraudulent marks on your report.
4. Don’t Create Any New Debts
Finally, while you’re battling credit card debt, it’s a good idea to put all borrowing and credit card spending on pause. Creating more debt will throw a wrench into your existing strategy by creating additional repayment amounts that weren’t planned for within your DMP. While you might feel as though “a little bit extra won’t hurt,” those small add-ons will not only make your monthly repayments larger, they’ll also have a detrimental effect on your current credit utilisation rate and score, which is something you don’t want when you’re aiming for a clean slate.
Do Your Research and/or Utilise Debt Counselling
In closing, while professional assistance is always recommended over going it alone, it’s also a good idea to do your homework to ensure that you’re not relying solely on the guidance of others. Having a solid independent understanding of credit card debt will ensure that you’re able to conquer your current arrears and avoid creating new ones in the future.