Are You Struggling With Credit Card Debt?

Each month, you may look at your credit-card bill and wonder how to deal with the mounting debt. In fact, credit-card debt is one of the most common ways people get into trouble with their finances. Bankruptcies can result from both the principal and interest adding up.

Don't hurt your credit by trying an illegal tactic to pay down the debt. As an alternative, use the credit-card company's offers as powerful tools. These tools give you a reprieve from mounting interest so that you can become debt free. Simply follow these basic steps toward financial freedom. It simply takes some awareness of your card's offers and payback periods.

Step 1. Research Balance Transfers

Credit cards are tempting tools when you're out shopping. You imagine an expensive item as being affordable as long as you can pay it off in the next 30 days. However, this payoff doesn't occur, and you pay a lot of interest fees as a result. As your debt grows, you may have stopped using the card altogether. You've learned your lesson by living within your means. The principal's interest on the card still grows exponentially, however. The first step toward a debt-free life is stopping the interest charges so that you can get ahead of the payments.

Do your research online where you can compare many different credit cards. You don't want another card to add more interest to your debt. Look for specific offers that advertise a "zero percent introductory balance transfer rate." You might think that these offers are limited in scope, but almost every major bank offers one. It simply entices new customers to the bank. Look for the longest time period that the zero-percent interest can last. The marketplace normally offers periods that can last as long as 18 months. Pick this card and apply for it.

Applying for a new card and transferring the balance may seem like a hassle. However, you need to look at the reality of the situation. Leaving your balance in place where it gains monthly interest will only cost you more money in time. Depending on your interest rate, a balance of $10,000 will accumulate $150 of interest each month. If you can only put $200 on the card each month, only $50 of the principal will be covered. Stop financing the bank with your hard-earned money, and transfer those funds to a zero-percent offer as soon as possible.

Step 2. Take Advantage of the Zero-Percent Interest

Don't allow your balance to sit idle after the balance transfer. You need to use this time period to your advantage. Consider your entire balance's value, and divide it out across the months included in the offer. Ideally, you want to pay off the balance by the time that the interest starts to accrue again. If that monthly amount isn't possible, try to pay off as much as you can to lower any future interest charges.

When you compare your financial progress between interest-laden cards and zero-percent offers, the difference is astounding. Two hundred dollars placed onto a card with growing interest will usually pay off just part of those charges. You won't see any movement on the principal itself. As a result, you cannot find your way out of the sinking quicksand of debt. Credit cards are designed to help the creditor gain more spoils than the consumer who uses them. When you take charge of your debt by using the zero-percent offers, you'll be able to climb your way out of the drowning debt. Take that step today so that you can reap the benefits of a debt-free life.

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