How To Get Out Of Credit Card Debt Without Paying?
Credit card debts are scary, but being unable to pay them off is even scarier. Imagine there’s a possibility of getting out of paying it back, sounds unreal? In this article we’ll be sharing just how real it is!
Debt is never easy, credit card debts are even tougher. It’s natural to feel that perhaps there’s absolutely no possible way of getting out of it.
When there comes a time where you’ve maxed out on your credit cards and in fact you’re further getting deeper in debt, you’re probably feeling extremely overwhelmed. “How am I ever going to pay off these debts”, is probably the one question you repeatedly ask yourself.
Technically, it sounds amazing if you can indeed get out of paying credit card debts BUT, it’s more harmful than you think. Now let’s be realistic, no you can’t get out of a credit card debt by not not even paying a single penny.
What we aim to do in this article, is to share with you how you can pay off your credit card debt without having to put everything you owe on stake, and share other options that you can consider when wanting to pay your debt.
How Much Debt Do You Have?
It’s natural to be hesitant about finding out just how much credit card debt you’re in, especially when you’re young and struggling to make a career or make ends meet. However, ignoring it will neither solve your problems nor will it make them go away.
So despite your fears, you need to tally up your debt amount. This will allow you to understand the severance of your debt and also what options are available for you out there. Don’t be ashamed as we’re here today so that you find a feasible solution.
No one’s judging you here.
Find a Payment Strategie
First and foremost, there are a few payment methods that you can consider when wanting to tackle your credit card debts. Having a solid strategy and repayment goal will not only help keep yourself in check, but your credit card debt as well.
Paying More Than The Minimum
It’s no surprise for banks to charge interest on your monthly installment, if you’ve decided to pay your credit card debt during a period of time suggested by the bank itself. Credit card issuers will generally charge 2-3 percent of your debt amount into monthly minimum payments.
This allows them to be certain that you’ll be able to make your payments on time. However, due to the interest charged by banks, the longer your repayment period is, the more money they will be making.
Hence, if there’s a month whereby you are able to pay more than the minimum, even if it’s just a few extra dollars, do it. This will reduce your repayment period. Even if it’s reduced by just one month, it’s worth it!
Basically, the snowball method has you prioritizing your credit card debts by the amount you owe, focusing on the least heavy amount first. Once you’ve paid that particular debt/loan, you’ll then roll the previous payment into the payment you’re contributing towards the next smallest loan, and this goes on.
Basically, this is similar to a snowball rolling downhill, in which you’ll make larger payments gradually,and thus be able to eliminate your entire credit card debt.
A debt avalanche approach allows you to swap your priorities when you’ve to pay off your credit card debt. This is similar to the snowball approach, however, in this approach you’ll instead pay off your credit card debt by paying off the card with the highest amount of interest and gradually pay the cards with the least amount of interest on them.
This approach is one of the cheaper and faster methods to pay your crest card debt as compared to the snowball approach.
By choosing to automate your payments, you’re in a way making sure your credit card debts are being paid regularly. This helps you avoid compiling additional charges on late fee payment.
However, if you’ve decided to automate your snowballing or debt avalanche approach, you will need to be much more alert in making sure you’re paying the exact amount each month in each account.
Let’s say your credit is perfectly normal or even good, but you’re finding debt repayments overwhelming, what you should consider is compiling them into one account. This way, you’ll only need to make one payment for all your cards each month.
You can consider taking a personal loan to pay off your credit card debt, also known as a fixed-rate debt consolidation loan. Of course you’ll be charged interest on the loan amount, however interest rates are lower on personal loans as compared to those on credit cards.
Another option is opting for 0 percent balance transfer credit cards. We know it sounds contradictory as you’re wanting to pay off your credit card debt and here we’re suggesting that you get another.
There are credit cards out there that offer zero introductory period payment – this can last form up to 15-18 months of time – and further transfer all your remaining credit card debt into that one account. The amazing part of it all is that you’ll receive on payment each month, and there will be no interest charged on it.
Icing Your Credit Card
Okay, let’s be real. Getting out of a credit card debt is not easy, which is why you MUST take your credit cards out of your wallet, just so there’s zero temptation to use them. Even if it means getting someone to hide it for you or locking it away, do it.
If you’ve a habit of paying for your purchases with your credit card all the time, you should start using cash instead. Once you’ve put your credit cards asie, you will have no choice but to use cash.
This will help you understand what exactly are your needs and wants. However, you should still remain conscious about your expenditure, and think twice before you decide to purchase anything.
A debt settlement is a formal agreement with a creditor in which you pay less than what you basically owe, but still have your debt considered satisfactory. There are two types of debt settlements that can be implemented.
- Do-it-Yourself (DIY) Settlement. A DIY settlement is a debt settlement in which you negotiate all on your own. You’ll negotiate directly with the creditors, hoping to settle your credit card debt for a much lesser amount than what you originally owe.
- Professional Debt Settlement. This is generally considered an extremely ill-advised and risky debt repayment schded. Basically, in this settlement, you avoid having to pay your debt. Instead, you’ll send your debt payments to a debt settlement company and they will attempt to negotiate a settlement with the relative creditors.
Unfortunately, the professional debt settlement approach rarely works out in the debtors’ favor. First of all, no matter how amazing this option sounds, this can cause a great deal of damage to your credit score when you’re working alongside a settlement firm.
Settlement firms claim that your inability to pay off your credit card debt gives them the upper hand when it comes to negotiating with your creditors. However, you are more than likely to be in the negative light, if you were to follow this cheme.
Secondly, according to research, debt settlement has a significantly low success rate. Not only will your credit sheet take a beating, but it may hinder you from ever receiving reasonable benefits of settling your debts.
Moreover, do be mindful that debt settlements are nowhere near being considered cheap. You can expect a high amount of fees and even if your debt is indeed forgiven, your forgiven amount will be charged as taxable income.
This should perhaps be your last option, even then, it shouldn’t be an option as debt settlement might leave you in a far worse position than you already are in.
Declaring bankruptcy is not a decision made overnight, in fact it’s a BIG and impactful decision to make because in all honesty, it’ll impact your credit score negatively. However, you’re able to rebuild your credit score with a little dedication.
Using your credit responsibility is definitely the best way to recover from a bankruptcy – but you’ll need to once again prove that you can indeed be a responsible borrower all over again. In simple words, it means that you’ll have to build a steady record of paying your payments timely.
Credit cards are a valuable tool that will help you build your credit once again but do know that getting a credit card after bankruptcy is not an easy task.
Filing for Chapter 7 bankruptcy allows you to wipe out any remaining unsecured debts, like credit cards, but with consequences of its own. Whereas,Chapter 13 bankruptcy allows you to break down your debt repayment over the next three to five years or even longer.
Depending on the type of bankruptcy you file, a bankruptcy filing can stay on your credit sheet for up to 10 years. Hence, why it’s so important to understand your options and weight which one is best for you.
Work Alongside Your Creditors
This is one of the most reasonable and genuine approaches when you’re trying to pay off your credit card debts. Reaching out to your creditors will allow them to better understand your situation and financial crisis.
This is a very common approach as a lot of people out there with credit card debt have opted for this option. Your credit card issuer might be willing to negotiate the payment terms after understanding your situation – especially if you’re an old and loyal customer with a good set of track record when it comes to payments.
You may be offered a hardship program. This will indefinitely provide you some sort of relief especially if your financial circumstances are much beyond your reach, such as unemployment or an illness that is perhaps affecting your payment abilities.
These small changes may just be what you’re hoping for, and the worst of it all is getting a no from them.
We know it may feel like it’ll take forever for you to pay off your credit card debts. You might skip payments or even file for bankruptcy. The bottom line is that until you’ve not made up your mind to take action towards paying off your credit card debts, none of the above solutions are going to help you.
Hence, decide which option works best for you and stick to it until you reach your goal!