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Paying Off Credit Card Debt

Paying Off Credit Card Debt
Credit card debt often tends to create a blemish on a credit report. Clearing it can be a difficult and frustrating task. Here are some important tips that would help you repay your debt.
Scholasticus K
Last Updated: Jan 28, 2019
You will notice that the usage of credit cards has led many borrowers getting into neck-deep debts, which are not exactly helpful, and reduce the credit scores and ratings of a card holder. Eliminating credit card debt thus becomes a dying need of the day, in order to rescue the falling credit rating.
Credit card companies approve applications of people who have an assured job or have a good source of income. Users can use these cards to pay for their expenditures. The credit card company bears these expenditures for the time being.
There is however, a certain limit as to the total amount of credit that the card holder can use. This limit is often termed as the credit limit. The holder cannot exceed this limit. However, there are some credit cards where this limit can be exceeded, with an extra charge that can be quite hefty.
At the end of the month, the credit card company sends its customers itemized bills on the basis of their transactions. This bill is basically a total of all the transactions and is levied with a specific charge. The charge of exceeding the credit limit is also included in this bill.
If you are able to pay off the bill easily, within the limits of your income, then no problem, just keep the cards that you use the most and cancel the remaining ones. An alternative, is that you can club together more than one credit card plan.
However, if you are finding it really difficult to accommodate the excess credit cards within your income, you might consider referring to the tips that follow. There are several different strategies for quickly clearing off credit card debt.
Step 1: The first step is to take a review of the different terms and conditions of the cards that you are using. The best way to do that is to have a look at 2 important figures, namely the rate of interest, or service charge that is levied by the credit card company, and the late charges that are levied for delayed payment.
Step 2: Compare the rate of interest with your usage of the credit card and your income. You will find that there are some cards which you use very less, and are still paying the rate of interest or the service charge. It is advisable that you cancel these cards and after pay off the pending amount as soon as possible.
Step 3: The third step of this process is the most crucial one. Here, you plan repayment procedure. The repayment process is always two-fold. Firstly, you will need to repay the already accumulated debt, and secondly, you will need to pay off the bills that have been charged on your current transactions.
For this, you will need to make 3 parts of your monthly income. The first part will be for your monthly income, the second one will be for current bills, and third one for your accumulated bills.
Step 4: By dividing your income into these three parts, you will be able to pay off the debt in a remarkably short period of time. This policy is probably the fastest way to pay off credit card debt, without borrowing a debt consolidation loan or having a debt settlement process.
The basic trick is to resist the temptation of spending, and sticking with the schedule of repayment of bills. One must also be aware of the fact that every late payment results into further negation of credit ratings, hence, a timely payment is absolutely important. It is also advisable to use a debt calculator.
Calculator feeds include rates of interest, amount that is due, and date on which it is supposed to be paid. The calculator will churn out the figures that are to be paid to the credit card companies.

The key to successfully eliminating credit card debt is to plan out the expenditures and then stick to planned expenses.