Get Out of Credit Card Debt Fast: Without Cutting up Your Cards — Make Credit Cards Work for You

If someone offered you a payday loan with a 30 percent interest rate, you would probably laugh and walk away. But people don’t hesitate to pay credit card companies anywhere from 15 to 30 percent APR. Why? Because the money is there and the credit is as easy as swiping a piece of plastic. Then they get stuck making only the minimum payment. That’s merely the interest on what you owe. If you never pay more than that, you’ll never pay off the loan.

Tips on Getting out of Debt and Making Credit Cards Work for You

  • Credit card companies are using consumers to earn high interest rates. Now, use them. Find a card that pays cash back. When you do that you’ll earn money on what you’re spending. To make this work, you have to pay the entire balance every month. Otherwise, you’ll pay more in interest than you get back in cash.
  • Negotiate a lower interest rate. Start immediately to pay off the entire credit card balance. But until you do, call the card issuer and ask for a lower rate. They’d rather reduce your payment then send your account to collections. The higher your credit score, the better your chances.
  • Pay off a little more debt each month. If you only made the minimum payment last month, pay 10 percent more this month. And 20 percent more next month…And so on until your credit card balance is zero. When that happens, continue to use your credit card and earn cash back. Every month you pay your entire balance, you’ll be making money instead of losing it.
  • If your debt is more than you can handle alone contact a qualified consumer credit counseling service. Contact the National Foundation for Credit Counseling to find a reputable agency in your area. The agency will negotiate with the credit card company on your behalf. They can often convince creditors to reduce late fees and over-the-credit-limit fees and possibly get you a lower interest rate.
  • Take out a home equity line of credit. A HELOC will give you a lower interest rate than the credit card company. But if you don’t pay off this loan, you could lose your home. Only consider it if negotiations fail with the card issuer and you have enough equity in your house.