Pay Off Credit Card - A Guide on How to Pay Off Your Credit Card

Do you need to pay off credit card? With the holiday season just behind us, many people are looking to the new year with more money on their credit cards than ever before, and want to know how to pay off a credit card. We all know it takes money to pay off the credit cards, but there are tricks on how to pay them, or who to pay first to get you out of debt as fast as possible. Within this article you will find tips on who to pay, how to negotiate interest rates, and what to do if you can’t afford the minimum payments set by the credit card companies.
Who do you pay first when you need to pay off a credit card?

You want to start this process by gathering all your statements for review. We need to establish what interest rate you are paying on each account. The account with the highest interest is the account we want to pay off first. One key item to notice is that most companies offer two rates, a cash advance rate (usually higher than any other rate) and a purchases/ balance transfer rate. You may have balances at different rates, so make sure to review this section of your bill carefully. Many accounts have rates between 9.9% and 29.99%, so make sure to review all your accounts to see which has the highest rate, and that is the one to pay the credit card first. Make sure to keep up on the minimum payments on any other accounts, if you miss them or pay them late you can be subject to late fees and higher interest rates which will just make the problem even worse.

How can you negotiate your interest rates?

Most companies have a standing policy that you cannot negotiate your interest rates. However, they have programs available for consumers to reduce their interest rates. The main thing you need to do is ask a customer service representative to reduce the rate. If you have paid your account on time and are in good standing with your creditor, they usually understand that 29.99% interest is very high and they may reduce your rate down to 15% or so. Interest rates for people with the best credit are around 10-15%. So if you need to pay off a credit card, and you have a rate lower than 10%, it is highly unlikely they will reduce the rate. If you have been late several times on the account over the last year, the company may not reduce your rate, but you can ask them to remove some late fees which can help you get your balance paid off quicker. If you have rates higher than 15%and your credit card company will not reduce the rates, and you are having difficulty paying those minimum payments, you may want to consider a debt management program. A debt management program is a prearranged agreement between you, a third party, and your credit card company where you pay the debt management company a monthly fee and they reduce your rate with the credit card company. Most debt management firms reduce the rate to between 5-10%. This reduced rate can help you pay a credit card off very quickly. The downside to this program is that the credit card company will shut your card down and not allow you to borrow on the account any longer. You will have entered a repayment program instead of a line of credit on the card.

If you still cant afford the payment, and want to pay off a credit card, you will need to consider a debt settlement program.

Within a debt settlement program, you choose to hold money from the accounts, and save that money to pay back the companies at a later date. The reason people choose to do a debt settlement program when they need to pay off a credit card is that it is the fastest way to get it done. A debt settlement program can take between two to four years depending on your account balances and how much you save each month. A debt settlement company will review how much money you have saved, and contact your creditors to settle each account. It is very common to settle an account for 40% of the original balance. So if you owed $10,000 to a creditor, and settled the account for 40%, you would end up paying the creditor back $4,000, saving yourself $6,000.

There are many factors that are needed to review when choosing what is the best way to pay off a card. If you have any questions, feel free to contact me.

Steve Sharma
Senior Researcher
http://www.debtsettlementreviews.net