Debt Avoidance

No person in this world would like to pay something extra to a financial institution than what they owe to the bank, so it is in the favor of people to acknowledge the habit of tracking down all their payments. The issue of credit card debt is day by day becoming one of the most important issues to be talked about in the town. It has been on hype since the past twenty years. For a regular user, it is almost next to impossible to follow cash in stead of the plastic card, but mind it, the better your effort is the more rewarding the situation becomes.  A perfect strategy will for sure help you achieve a debt free credit history.

Reading through various different journals and magazines many expert advisors have the feeling that it’s better to pay off the lower debts first than the higher ones. Eliminate-Credit-Card-Debt.com would like to correct all those people who have this in their minds. It is a very good feeling when you see that the number of credit cards with lower balances is reducing with time, but if you work out with your own calculations, you are in a loss. Balances with higher interest rates accumulate interest costs more quickly, meaning you pay more to the credit card company in interest and less in actually paying down the principal amount that you owe. This is a basic fact which most of the people do not realize. Let us see in detail how you can break the debt of the card with the highest interest.


TRICK 1

The RCC (Rising credit crunch) Method

Credit card debt for many people is a sickness which they want to cure of, but deep inside they want to stick with it. Eliminate-Credit-Card-Debt.com is the only place where you can find this method which has helped an immense amount of people. Because someday, sometime you have to make a starting so why not that day be today and why not that time be now. Many financial experts refer this method. This is a tested and proven debt elimination scheme which I have named as the RCC Method.

  1. Get your latest statements of all your credit cards. List all of your credit cards, including the balance, the interest rate, and the minimum payment percentage and the minimum payment on a paper. The minimum payment percentage may be found in the small print on your credit card statement or your cardholder agreement. Banks usually have a minimum payment percentage 2 and 2 1/2 percent of your balance.
  2. Now write the credit card with the highest interest rate at the top and make a decreasing order of the list starting from the top and ending with the card with the lowest interest rate at the bottom of the list.
  3. Note down the minimum payments to be made for each card and write in front of it. Calculate the total minimum payout for all the accumulated credit cards.
  4. Now it’s time to work out your resources and see how much more money can you generate in addition to the accumulated total minimum payouts. You may make some adjustments in other bills and divide your time to generate additional funds. It might seem difficult at that moment but this effort is very rewarding.
  5. You just cannot stop paying the other credit cards, so pay the minimum monthly for all the credit cards except the one on the top. For the credit card on top of the list, you may sum up the minimum fixed amount plus the additional amount you will have generated plus the savings you would have made by chopping your extra expenditure. This way there will be a substantial amount of money which you can pay for the card.
  6. Keep following this routine unless you have completely demolished the debt for the credit card with the highest interest rate in the list. Once this is done, direct all the funds which were earlier dedicated to the first credit card, to be utilized for the second card in the list. You will find that in a less amount of time you will have paid a huge chunk of your debt. Now continue doing this unless all the debts for the cards in the list have been paid off.

It’s easy to say than to do but imagine whatever debt you are able to remove, goes to your savings. So in a way the more debt you remove, the more you are saving to your future. I hope now you will agree to the fact that it makes you feel much better to see the reducing number of the credit card debts but actually it costs you more money in the form of interest. Since banks tend to raise the interest amount on your previous debt so in many cases, the interest amount far exceeds the principal amount.


TRICK 2  

The Revolving Card Method

This second trick Eliminate-Credit-Card-Debt.com suggests is a really tricky tool for implementation. How many of you have thought of using different cards and banks to their personal advantage? I am sure, not many. Most people do not recognize this as an option but here at Eliminate-Credit-Card-Debt.com we provide you with what is referred to as pure intelligence. At any given time during the year we can find credit cards which are carrying or offering lower interest rates than our own. During the time period when interest rates are low in general, we can find rates as low as 0% to 6% for 6 months. This is not a one time scheme. Banks usually introduce these offers under the category of ‘Specials’ like Introductory Offers, and Balance Transfer Offers. Banks do this to encourage new clients to switch over to them, taking business away from other banks. Simply put, these are real golden moments we should always take an advantage of, no questions asked.

The scheme is that a zero percent rate which this introductory card offers, compared to what you are paying at the present stage will contribute heavily to your savings especially if most of your shopping spree is through credit cards. The difference might not be a very big amount, but whatever the amount be, it is contributing in your principal amount and ultimately decreasing the amount of your loan.

Now in such a scenario, no body would say no to a card which offers zero interest rate to you. It is like a jackpot with a time period. Didn’t get it? I will tell you, the life of these cards with zero interest rate may be limited say for about six months or so and after that the bank will come back to charge the same rate of interest. After this time period, you can hunt down another card and start all over again unless you remove all your existing debts. No doubts, this is inconvenient but at least you are saving something for the good. Make sure once you get out of the debt, never let the debt situation come again. Follow the simple steps explained in and around Eliminate-Credit-Card-Debt.com to budget your life and increase your savings.


Lucky Seven Tips to avoid a future debt:
Once you are out of your debt, you have to follow a regime. The situation can be compared to a person who is fat, then goes to gym daily and cuts his meals, in months he reduces weight and is now happy. Now, if he starts eating again the way he did before in order to celebrate his getting slim we all know he will get to the same old position in a time span less than even he can think of. So it is very important to maintain consistency.

  1. Pick up your phone and call the bank today. Ask them to revise your interest rate. It is astonishing to know but no bank would like to lose a customer so in order to save the client; they have directions to make the client happy by reducing your interest rate to a certain limit. But whatever lesser interest be, it adds up to your savings. 
  2. Be very consistent in saving money. Just like a minimum monthly to be paid for the credit card, take out a minimum monthly towards your savings. This ways after the end of the fiscal year, you will have an extra amount in the form of your monthly savings.
  3. If you do not get a low rate from the bank, get a new introductory credit card as explained above and enjoy the zero rate. Make sure you revolve it around after the end of the introductory period of the card.
  4. Do not fall for the card again, have alternatives in stead of the regular credit card you shop around with, start using a debit card. A debit card is similar to a credit card and in a way better since the money is subtracted from your bank account and obviously you cannot spend more than what you possess in the bank. You do not have to worry about to pay the bank later.
  5. Stick to a monthly budget. It shall be harder to implement in the initial stage after getting out of a debt, but it is very important that you realize the value of every item you purchase.
  6. Throwing away cards and cutting them off seem childish but one of the simple and best ways to avoid using a credit card as told by a successful financial expert ‘Mr. Raghav Choudhary’ is by not carrying them with you. You should have them, but you should use them only in case of utmost emergency. That simply saves a lot of money.
  7. Last but not the least method is to write cheques since you will be unable to make a purchase if the money is not in your account. It will also help you in developing the habit of not using a credit card.

Conclusion:

Don't wait till your credit card payments become the largest part of your monthly budget. Follow a Debt Reduction Strategy to chop out your debt. Be consistent in having your monthly savings just as the monthly payments you make towards your credit card statements. Eliminate-Credit-Card-Debt.com has provided you with all the options available in the world, there might be more but if you follow them there shall be a distance between you and your debt woes. Hope you learn about your options and pick up a few simple tips in and around Eliminate-Credit-Card-Debt.com.

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