Select Page
Budgetboost.co is supported by its readers. If you click on or buy something via a link on this page, we may earn a commission.
Budgetboost.co is supported by its readers. If you click on or buy something via a link on this page, we may earn a commission.

How to Get Out of Credit Card Debt: Best Way to Consolidate or Pay Off

Updated: October 2019
Follow us on: Pinterest
OUR TOP DEBT RELIEF PICK
National Debt Relief
Why National Debt Relief?
  • National Debt Relief provides expert guidance and financial counseling.
  • You will be provided a budget plan to address bad financial habits.
  • You can get a lower monthly payment to meet your tight budget.
  • You will be saved from the stress and hassle of dealing with creditors.
Try National Debt Relief

How to Get Out of Credit Card Debt: Best Way to Consolidate or Pay Off
Through one way or another, you may have taken a look at your finances and realized that you have accrued a substantial amount of debt. Perhaps it’s even reached the point where you no longer want to look at your bills for fear of how it will impact your stress levels. However, your debt isn’t going away no matter how much you might want it to just disappear. The best course of action is to, of course, spend little while you put most of your earnings towards your debt. This is often easier said than done for those who have a small income or just really bad debt. In an effort to help you pay off those credit card debts, this in-depth guide will give you a few steps to help you get out from under all of that weight.

Table of Contents

1. Discover How Much Debt You Actually Owe

While it may be difficult to look at, you need to go through each of your bills to figure out exactly how much you owe on each payment. It’s also important to know the interest rate of each bill and what the minimum payment for each is. If it doesn’t state on your bill how much the interest rate, then you should take the time to look it up. Usually, you can just go on the website that they provide and take an in-depth look at the details.

Knowing the interest rate is important because you need to sort which debts have a high-interest rate and which have a low-interest rate. The higher the interest rate, the more you’re going to be spending towards that bill. Essentially, you’ll be putting a lot of money towards the debt with the high-interest rate.

When all is said and done you’ll have yourself a total number of debt that you owe with all of the fine details written on the side. No doubt you might feel as though you’re having a stroke looking at that number. It’s okay to panic. Just remember that you’re going to be seeing that number slowly decrease over time. Which brings you to our next step.

How to Get Out of Credit Card Debt: Best Way to Consolidate or Pay Off

2. Choose Your Approach

There are two main methods of paying off debt. It involves two different processes that you’ll have to determine which is more important to you. The first is often called a debt snowball. This process requires you to focus on the smallest balance without considering the interest rate. Like a snowball, you’re going to be building that ball larger and larger with each payment until you pay off the debt entirely. So, while the focus of your payments goes towards that specific balance, you should also be making minimum payments on your other debts so that you don’t accrue further debt by letting the amount run up due to interest.

The snowball method isn’t a bad idea if you have enough money coming into your wallet that can quickly get rid of the smaller debts. For example, if you have a store credit card or something with a small balance that you can completely wipe out with a single paycheck, then that’s one less debt payment to worry about. However, it does take longer to pay off the larger debts because you’re nibbling at it a little at a time.

This leads to the second process known as a debt avalanche. This process is similar to that of a debt snowball except that it focuses on interest rates instead of the balance. Essentially, you focus on the debt that has the highest interest rate and focuses on paying off that one while making minimum payments on your other bills. The idea behind this process is to eliminate high-paying costs as quickly as possible.

By doing so, you can save a bit of money in the long-run and have more of your income to throw at the next bill and so on while you knock out each high-paying debt. This process is usually faster to get out to debt and is typically a lot cheaper. If you leave the high-interest rate debt on its own, then it’s going to accrue a whole lot more money than if you knock it out quickly.

Choosing your method largely depends on what works best for you. The debt snowball method can take care of a few smaller debts quite quickly. It also lets you see satisfaction a lot quicker by removing debt entirely. However, the debt avalanche method is cheaper and limits the amount of money that your debtors receive from you. Basically, go over which method best works for you financially. While one method may be slower than the other, you don’t want to have to be living in poverty just to get rid of your debts quickly.

Either way, make sure that you track your progress. Not only is this a good way to keep track of how much you still owe, but it also allows you to celebrate milestones as they come. This can keep you from burning out, and instead, staying on the good path of getting out of debt.

3. Making Changes

While small changes can certainly help you to pay off debts consistently, you may also want to consider making a few big changes. This can help you to quickly get out of debt by focusing all of your efforts towards those debts. The first change you may want to consider is completely getting rid of your credit cards.

While credit cards certainly have their uses in the event of an emergency, they can also be a terrible gateway for impulse purchases. The ease of buying things and facing the consequences of those purchases later is exactly what lands numerous people in debt in the first place. It can be incredibly discouraging to pay off debts only to find that you have more coming at you because you made an impulse purchase with your credit card.

Sometimes, it’s best to just throw away the easy access entirely and only use a prepaid debit card. Cut up those credit cards, cancel them if you can, and instead just rely on cash and debit cards. This will keep you on track with removing your debt without adding further debt onto your shoulders. In addition, it might also help to change your spending habits which can benefit you in the future, too.

Another big change that you might want to consider is selling your car. Those car payments can be pretty rough. If you owe debt on your car, then getting rid of it could be a good way to just eliminating that debt entirely. However, you should try to keep up with your car payments, so you can sell it at a decent price. Instead, replace your car with a used one.

You should go to independent dealers to receive the best price. You might even want to consider private sales. You can usually find cars for quite cheap. As long as the car can get you to where you need to go, does it really matter what it is and what it looks like? Besides, think of it as a short-term solution to help save a bit of money. Once your debts are clear, you can always treat yourself to a new car. As long as it doesn’t land you right back into debt, that is.

You may also want to consider downsizing the number of cars that you have. While it is pretty typical for families to have at least two cars, is it really necessary? Sure it may be convenient for you and your spouse to drive separate ways to go to work each day, but what’re an extra few minutes to drop off your spouse when you end up saving a couple of hundred dollars a month? By limiting your car payment to just one in the household, you can find yourself with a few extra hundred dollars that you can put towards your debt instead.

Again, this may only have to be a short-term solution until you get out of the hole. As long as your budget covers it, you can always get another car again later. Sacrifices need to be made in order to get out of debt as quickly as you can.

Investing is another practice that you should put a pause on for the time being. Saving for your future is always a good idea, but you need to focus on the present for a little while. While you shouldn’t cut your 401(k) contributions, you should examine the rest of your portfolio. Pull those investments for now. It may be difficult when the future is so important to you, but you need to set your priorities. Besides, just think of it as investing in the present. Once you’re out of debt, you can return to investing with likely a lot more money that you can invest than you did before. When you are ready to invest again consider using some of the best investing apps now available that take away a lot of the stress involved. Our Ally Invest review is a good example of such as service..

When was the last time you really looked at your cable bill? Is it really necessary to pay over a hundred dollars for a TV system where you only actually watch a few of the channels? Cable is basically a thing of the past. Nowadays, you can easily stream shows at a fraction of the cost. You can also typically find the shows that you want to watch free on the Internet, too. Even certain sport’s programs can be found for free. It’s not a bad idea to cut the cable and limit the amount of TV that you watch. If cable is really important to you, then you can always have it hooked back up again once your debts are clear.

One great way to bring in extra money and do a little bit of downsizing in the process is to sell the stuff that you don’t need or use. You likely will be surprised at just how much you’ve accrued over the years that you don’t actually need or use anymore. It may also be an important lesson for you to see just how much you really don’t need stuff. Go through all your books, clothes, games, kitchen gear, electronics, everything, and instead of just tossing them out or donating them, try and earn a bit of money instead. In fact we recently reviewed great places to sell textbooks. You can always donate in the future. Right now, however, you need the money more than anything. This extra bit of cash could be exactly what you need to clear an entire debt payment. That’s one less bill that you have to worry about in the future and all you did was sell stuff that you no longer needed.

How to Get Out of Credit Card Debt: Best Way to Consolidate or Pay Off

4. Create A Budget

While it may be easy to say that you need to create a budget, there is a lot more effort that needs to be made before you just magically find yourself with one. You’re going to have to do a bit of research into your spending habits, the expenses that you see in a month, and how much you need to live on in a given month. By creating a monthly budget, you can make sure that you still have money to pay off your debts while still having some financial flexibility that enables you to buy food and other items to make your life more comfortable. In this section, we’ll go over a few steps on how to create a monthly budget that works best for you.

First, you need to figure out exactly how much you make. You can examine your paystubs or simply examine your bank records if you receive direct deposit to see how much you earn each month. If your money varies from each deposit, then it might be a good idea to calculate an average.

Second, you have to calculate what your core expenses are. These are the bills that absolutely must be paid each month. This might include rent or a mortgage, electricity bill, groceries, and certain insurances. These items are those that absolutely have to be paid each month, non-negotiable. Clearly, rent and mortgage need to be paid to make sure that you have a home to live in each month. The same goes for car insurance if you need at least one car in the family. Groceries, clearly, are needed to keep your family fed. Tally up all of these costs so you have a good understanding of where the main funnel for your spending is going to be.

Third, it will be helpful to write down your debt payments. When you do this, it’s a good idea to just simply write down the minimum payments for each debt payment as if that was how you were going to pay them off. If you happen to know which method you’re going to pay the debts off with–debt snowball or debt avalanche–you can put that here instead, but until you get that figured out, just write down the minimum payments you can make for each bill.

Fourth, it’s time to make a lot of categories for other expenses. It’s not a bad idea to make a lot of categories for this section as that can help you remain more organized and understand where expenses are going. These expenses might include medical costs, haircuts, internet, pet costs, home repair, car repair, and other emergency funds. These are expenses that you may not need to pay each month, but if you can put a little aside for them each month, or every other month, you’ll have a decent amount right then and there for when you need to utilize those funds.

The final step is to examine the amount of money that you have left over. This is the money that you’re going to use to pay off your debt with and play around with. After all, even though you’re working to pay off your debt, you should still let yourself have a little pocket change to treat yourself now and then. Otherwise, you’re going to become miserable and quickly. That misery may prompt you to buy an impulse purchase. By allowing yourself little treats here and there, you can instead stay on the good path of spending a little while directing the bulk of your income to your debts. This is also a good time to see if your income can cover your debt payments as well as those non-negotiable bills each month. If not, then you need to revisit your budget and take out some more in the category section. Or look to your non-negotiable section and determine what cuts you can make there. Perhaps you need to move into a cheaper apartment or include a roommate to take off some of the bulk of the monthly payment. Again, maybe you need to get a used car or remove a car from the household. With all of the information at your fingertips, you can make the financial decisions that you need to ensure that you have enough money to pay off your debts while still having enough leftover to reward yourself with from time to time.

Once you have your budget in order, it’s important to know that it’s okay if your budget flexes. Not every month is going to be the same. You may have a more expensive electric bill in one month than you do the next. You may somehow make more in one month than you did the other. You can use the category section, in particular, to flex your money around. Spend when you need to and save whenever you can.

Emergencies are the most difficult aspect to prepare for. They’re impossible to predict and often end up costing more than you’re prepared to spend. When an emergency arises, you should do what you can to limit the amount that you spend. Instead of buying a brand new part, perhaps you should look into a used or refurbished replacement instead. Depending on the job, maybe you know a friend or relative that can fix the problem for a reduced cost instead of hiring a business. Instead of just spending the big cost to have the emergency taken care of or repaired, examine your options and make cheaper decisions where it is possible.

Another aspect of budgeting that might help you is to use apps. You live in the age of applications on your smartphone. Why not let it help you with budgeting, too? There are numerous apps out there that can help you keep track of your expenses, income, and even get rid of old subscriptions that you hardly use anymore. With this powerful tool at your side, you can forge a monthly budget with ease and stay on track with your spending and savings, too.

 

How to Get Out of Credit Card Debt: Best Way to Consolidate or Pay Off

5. Lower Interest Rates

Besides just cutting costs, another way that you can help yourself save money and pay off debts faster is to lower your interest rates. There are quite a few ways to do this and this section will go over them. There are many companies that offer personal loans online

In the event that a lot of your debt comes from having a hard time paying off student loans, you can always examine the option of refinancing your loans. This will help to lower your interest rate but also typically means that you have a shorter term on your loan, too. As a result, your monthly payments may go up. However, you’ll get out of debt faster by paying the larger sum with the smaller interest rate. If a student loan is your primary debt, then this could be an excellent option of reducing the amount that you spend on that loan, so you can pay it off a lot faster.

While it may seem like credit card interest rates are set in stone, they’re not. They usually have to change them based on keeping their customers loyal. So, really, you’re the one who can control what interest rate you see. Of course, it helps if you’ve been part of their company for some time and have a good standing with them. You can easily call them and ask them to lower your interest rate. In order to get them on your side, you should mention how long you’ve been a member with them. It also doesn’t hurt to drop a hint that other credit card companies are offering you low-interest rates. Especially that they are offering a 0% introductory rate for a balance transfer. This can scare the company just enough to be open to negotiating a lower interest rate with you.

In addition, you might actually want to consider a credit card transfer. There are a few companies that offer a reduced interest rate for balance transfers. If your current company isn’t open to lowering your interest rate, then you should consider transferring to a company that will.

6. Improve Spending Habits

The biggest way you’re going to help yourself have enough money to pay off those debts is to be mindful of your spending. Look for ways where you can save on your food spending. Eat out less at restaurants, go to farmer’s markets where they have reduced prices, and keep from buying impulsively at the store. Finally, nix out the hobbies that cost you a bunch.

7. Consolidate Your Credit Card Debt

There are two primary ways that you can consolidate your credit card debt. The two options are using a balance transfer card or getting a consolidation loan. Each method has its own advantages and disadvantages. That means you should carefully consider your options to decide what’s best for you.

The first option is to use a balance transfer card. This is a special type of credit card. It is designed to help people lower their monthly credit card bills and get out of debt faster. The way it works is pretty simple. First, find a balance transfer card that can hold your current credit card debt. Balance transfer credit cards come with a special feature that helps you lower your debt faster. That feature is a 0% introductory APR.

This 0% APR will last for a set period of time. During this time, your interest is deferred. If you pay off the whole of your balance before the intro period ends, then you won’t pay any interest. That can save you thousands of dollars on your debt. It also means that 100% of your payment will go toward your balance. As a result, your debt will be paid off much more quickly than if you were also making interest payments.

However, there are some risks with a balance transfer credit card. The biggest risk you take is that you aren’t able to pay off your balance before your 0% APR expires. This can be devastating. That’s because the 0% APR period is a deferred interest period. This means that if you have any balance at all when the intro period ends, then you’ll be hit with all of the interest charges from the very beginning of your consolidation. Moreover, these interest charges are typical of what you get with credit cards – that means they’re much higher than a consolidation loan.

A consolidation loan is the other option you have for consolidating your credit card debt. The way a consolidation loan works is also very simple. You get a loan for the amount of debt you wish to consolidate. Your lender will usually pay your credit cards off directly. Then, instead of multiple high-interest credit card payments each month, you just have a single, low-interest payment to make.

This means that you can pay off your credit card debt much more quickly. It also means that your debt will go from utilizing your available credit to becoming installment debt. As a result, many people who get a consolidation loan see an immediate bump up in their credit score. That’s because credit scores don’t evaluate how much debt you have, but instead take into account how much of your available revolving credit you’re using.

The drawback of a consolidation loan is that you’ll be paying interest the whole time. However, this interest rate will be lower than what you get with a credit card. Moreover, you won’t need to worry about deferred interest charges appearing, unlike with a balance transfer card.

As you can see, there are pros and cons to each option for credit card debt consolidation. Carefully evaluate each option to determine which is the best for your specific situation.

If you’re looking for personal loans online, Self Lender might be able to help. 

 

FAQ

General Questions

In this section, you will find answers to general questions regarding how to get out of credit card debt.

Your Title Goes Here

Your content goes here. Edit or remove this text inline or in the module Content settings. You can also style every aspect of this content in the module Design settings and even apply custom CSS to this text in the module Advanced settings.

How to pay off credit card debt when you have no money?

The best way to pay off credit card debt when you have no money is to:

  • Make sure you don’t have any late fees that need to be paid.
  • Avoid receiving any bank overdraft or nonsufficient fund fees.
  • Make a strict spending budget for yourself.
  • Ask your bank to waive any additional fees you may owe.

How to get out of debt with no money?

There are several ways to get out of debt when you have no money. The best ways are:

  • Avoid receiving insufficient fees from your bank.
  • Create a budget that you stick to strictly.
  • Make sure to use your specific bank ATM’s to avoid adding additional fees to withdrawals.
  • Call collectors or banks to waive existing fees.
  • Make some extra money on the side using the best app to make money from your phone.

How to pay off debt fast with low income?

The best way to pay off debt fast with low income is to:

  • Create a budget based on your minimum daily and monthly needs.
  • Use any extra money you may earn to pay off debt.
  • Make sure to set aside enough money to pay yourself first.
  • Identify any spending triggers you may have.

How to pay down credit card debt?

The best way to tackle paying off your credit card debt is to first pay down the credit card that has the highest interest rate or to pay off the credit card debt that has the smallest debt balance.

How to figure out debt to income ratio?

In order to determine your debt to income ration, you can take the total debt figure owed and divide it by your existing income. Doing so, you can figure out how much of your income you can use to reduce your current debt.

Which debt to pay off first?

There are two types of debt that you will want to pay off first: the debt with the lowest balance amount or the debt with the highest interest rate. You can also consider the debt that will take you the shortest amount of time to pay off first.

What happens if you don’t pay credit card debt?

If you don’t pay off your existing credit card debt, you can expect to incur late payment fees, increased credit interest rates and potential damages to your credit score. If you continue to miss payments, your debt can be turned over to a collection agency.

What is the best way to pay off credit card debt?

The best way to pay off credit card debt is to:

  • First take a look at your existing credit card debt and separate it into chunks instead of one balance.
  • Pay off the existing debt that contains the smallest balance or a balance that can be paid off the fastest.

How to pay off credit card debt according to Suze Orman?

According to Suze Orman, you can pay off your credit card debt by:

  • Transferring your existing credit card balance to a new card that charges zero interest for a minimum of a year.
  • Don’t charge anything to this new card unless you can pay it in full every month.
  • Track what you need to pay each month toward your existing debt.

How to pay off debt and save?

The best way to pay off any existing debt and saving money in the process is to:

  • Always make sure you pay yourself first.
  • Put as much as you can towards your debt without leaving yourself completely broke in the process.

How to pay off $10,000 credit card debt?

The easiest way to pay of $10,000 in credit card debt is to either:

  • Pay off the credit card that contains the highest interest rate and work your way down your existing debt.
  • Pay off the smallest debts first and work your way up.

How to pay off $20,000 in credit card debt?

The best way to pay off $20,000 in credit card debt is to:

  • Focus on paying the debt with the highest interest rates first.
  • Consider applying for a personal loan to pay off the debt balance in one lump sum.
  • Transfer the existing debt onto a zero-balance card and pay it off slowly without adding to the balance in the process.

How to get a loan to pay off debt?

In order to get a loan to help pay off the debt you currently ow, you will need to apply for a debt consolidation loan or a personal loan. Make sure to apply for a loan that offers an affordable fixed rate with monthly payments that never increase.

Why does your credit score go down when you pay off debt?

The reason why your credit score may go down when paying off your existing debt could be due to credit utilization, age of the credit card debt, what kind of credit you have and existing applications for credit.

How to get out of credit card debt without ruining your credit?

The best way to get out of credit card debt without ruining your existing credit is to ensure you pay all of your debts on time, settle a debt with the exact balance that is due to satisfy the debt and avoid applying for new lines of credit.

How can I find out how much debt I owe?

The best way to find out how much debt you currently owe is to check your credit report. Another way to check your existing debt is to contact a credit collection agency that may have ownership of your debt.

How to pay off debt with a birth certificate?

There currently is no way to pay off debt with the use of a birth certificate. This is a persistent myth and one that was debunked years ago as a get-rich-quick scheme. The only way to pay off a debt, is to pay it off yourself.

What is the best way to get out of debt?

The best way to get out of debt is to:

  • Pick up a side hustle to earn extra money to pay off your debt faster.
  • Pay off more than the minimum balance on existing debt.
  • Create a budget for yourself that you strictly stick to.
  • Request for lower interest rates on any existing debt you may have.

According to Dave Ramsey, how to get out of debt?

According to Dave Ramsey, the best way to get out of debt is to use the Debt Snowball Plan. The Debt Snowball Plan works by staying current on all of your bills and saving $1,000 in an emergency starter fund. Then you would make the minimum payments on all of the debts except for the smallest debt owed. Repeat the steps until most of the debt has been paid off.

How to find out who owns your debt?

The best way to find out who owns your current debt is to call the original creditor and ask them directly. They will tell you if they have sold your existing debt and if so, make sure to ask for the name of the company that purchased the debt.

When one person agrees to pay the debt of another as a favor to the debtor, what is it called?

It is called a collateral promise. This type of promise renders the person who has made the promise a guarantor or surety upon a debt owing by a third person. Keep in mind this type of promise is not made for the benefit of the party making the promise.

How to get out of debt when you are broke?

The best way to get out of debt even when you are broke is to:

  • Create a budget for yourself that will help you make better spending decisions.
  • Put together a plan to pay off your debt.
  • Stop creating debt for yourself in the first place.
  • Cut out any unnecessary expenses.
  • Find out how you can increase your income.

Credit Card Debt Payoff Period Questions

In this section, you will find frequently asked questions pertain to the payoff period of credit card debt.

Your Title Goes Here

Your content goes here. Edit or remove this text inline or in the module Content settings. You can also style every aspect of this content in the module Design settings and even apply custom CSS to this text in the module Advanced settings.

How to pay off credit card debt fast?

The best way to pay off credit card debt fast is to:

  • Stop using any credit cards immediately.
  • Make sure to use a credit card with no balance for regular purchases.
  • Create a budget specifically for paying off more of your debt balance.
  • Cut any unnecessary expenses.

How to get out of debt fast?

The best way to get out of debt fast is to make sure you allocate as much as you can to your existing debt. Then pick a strategy to lower your debt in as fast a way as possible such as the snowball method. Also be sure to not add to your existing debt.

How to pay down debt faster?

The best way to pay down your debt faster than average is to make sure you pay off any existing debt that has the highest interest rates, double up on any existing debt payments you may be making and make as many cuts to your regular spending that can be put towards paying off your debt.

How long does it take to pay off debt?

This depends on the amount of the debt that is owed, how much the interest rate is on your existing debt and how much is being put towards erasing that debt. It can take anywhere between a few months to a few years to rid yourself of debt.

How to pay off debt in a year?

The best way to pay off the debt in a year is to use any existing savings you have to pay off a few small balances on your credit card debt. Then take the remainder of your savings to pay off the highest debt balances.

How long does it take to pay off college debt?

Most college loans will require borrowers to pay back their college debt within the span of a 10-year period. However, most people can take as long as 21 to 25 years to pay off a college debt for a bachelor’s degree.

How to get out of debt fast on my own?

The best way to get out of your debt fast on your own is to:

  • Pay more than the minimum payment allowed.
  • Pick up a part time job that you can use solely for the payment of your debt.
  • Ask your credit lenders to lower the interest rates.
  • Create a spending budget and stick to it, no matter how hard it is.

How to get out of debt in 6 months?

In order to get out of debt in 6 months, it will depend on how much of a debt you currently owe. However, the best method to use is the debt snowball method. Meaning you pay the minimum monthly payment toward each account. Once a debt has been eliminated, you use the extra money to get rid of the smallest debt you currently owe. Then repeat this method.

How many months will it take to pay off a $525 debt?

It can take as little as 2 to 3 months to pay off a debt of $525. This ultimately depends on how much you put towards your debt balance. It is best to pay off more than the minimum balance if you expect the debt to be wiped within this time frame.

Credit Card Debt with Bad Credit Questions

In this frequently asked question section, you will find answers pertaining to eliminating credit card debt with bad credit.

Your Title Goes Here

Your content goes here. Edit or remove this text inline or in the module Content settings. You can also style every aspect of this content in the module Design settings and even apply custom CSS to this text in the module Advanced settings.

How to get out of debt with no money and bad credit?

The best way to get out of debt with no money and bad credit is to:

  • Call your lenders directly and see if they will forgive your debt.
  • Ask to settle the debts for much lower than what is owed.
  • Sell the items you don’t use to pay towards existing debt.
  • Ask your lenders for a hardship repayment plan.

If you’re needing more money and you’re a stay at home mom then take a look at some of the work from home jobs for moms we covered in another article.

How to get out of debt with bad credit?

The best way to get out of debt with bad credit is to:

  • Join a credit union to start a good relationship with the bank.
  • Consider using debt consolidation loans meant for bad credit to erase your existing debt.
  • Sign up for a debt management program.

What debt to pay off first to raise your credit score?

The best debt to pay off first in order to raise your credit score is to pay off the debt with the highest interest rate first. Then work towards paying off the debts with the smallest amounts owed.

Credit Card Debt Collections Questions

In this section, you will find answers regarding credit card debt collections.

Your Title Goes Here

Your content goes here. Edit or remove this text inline or in the module Content settings. You can also style every aspect of this content in the module Design settings and even apply custom CSS to this text in the module Advanced settings.

How to deal with debt collectors when you can’t pay?

The best way to deal with debt collectors when you aren’t able to pay them is to:

  • Know your rights first.
  • Don’t make a promise to pay and don’t give any payment information that can be used later.
  • Be respectful and courteous.

How to pay debt collectors?

The best way to pay debt collectors is to:

  • Double check the amount of money you actually owe towards your debt.
  • Calculate the amount that you can afford to pay towards your debt each month.
  • Contact the debt collection agency directly.
  • Make your payment by phone by talking to a debt collection agency representative directly.
  • Monitor you credit to make sure paid items are removed from your report. Use a service like Identity Guard to both monitor your credit and protect your identity.

How much do collection agencies pay for debt?

Debt collection agencies often pay for debts in bulk packages. Sometimes these debts can be paid for 4 cents per every dollar of the debt value. In other words, a debt collection agency could pay $40 for a debt that is over $1,000.

How to find out what debt collectors you owe?

The best way to find out what debt collectors you owe is to either contact your original creditor directly or check your current credit report where the collection agency will be listed under the owed debt.

What happens if you don’t pay a debt collector?

If you don’t pay a debt collector, you may be liable to lawsuits from the credit collection agency. This can result in your wages being garnished and for your credit rating to take a negative hit in the process.

How to Get Out of Specific Types of Credit Card Debt

In this section, you will find answers pertaining to specific types of ways to get out of credit card debt.

Your Title Goes Here

Your content goes here. Edit or remove this text inline or in the module Content settings. You can also style every aspect of this content in the module Design settings and even apply custom CSS to this text in the module Advanced settings.

How to get out of student loan debt?

The best way to get out of student loan debt is to:

  • Pay more than the minimum balance allowed every month.
  • Make sure to talk to the student loan company directly for an income-based repayment plan.
  • Consider a student loan consolidation loan to pay off the debt faster.

How to get out of student loan debt without paying?

There are few ways that you can get out of student loan debt without paying is to:

  • Ask the student loan lender for an income-based repayment plan.
  • Look into loan repayment assistance programs.
  • See if your employer will offer tuition reimbursement.

How long does it take to pay off medical school debt?

This will depend on how much a debt is from medical school and the type of medical degree you go for. On average, it can take between 10 to 15 years to pay off existing debt from medical school.

How to get out of payday loan debt?

The only way to get out of a payday loan debt is to pay it off directly. The best way to pay it off includes:

  • Applying for an extended payment plan.
  • Refinance your payday loan with another loan.
  • Pay the minimum payment on time every month.

How to pay off college debt?

The best way to pay off any existing college debt is to:

  • Pay more than the required minimum payment every month.
  • Make any extra payments if you can.
  • Consider finding a second job to make higher payments.
  • Apply for an income-based payment plan with the college loan lender.

How to pay off debt on a credit report?

The best way to pay off debt on a credit report is to find any outstanding credit balances listed on the credit report. Then call the outstanding debt lenders directly to make payments toward your debt.

How to get out of title loan debt?

The most straightforward solution to getting out of a title loan debt is to pay off the debt directly. However, you can also sell the car your have the loan on to wipe out the debt of consolidate your existing loan.

How to get out of tax debt?

The best way to get out of tax debt is to pay the existing tax debt directly. You can also freely have your wages garnished for a higher amount to pay off the tax debt faster.

How to pay IRS debt?

The easiest way to pay off IRS debt is to make regular payments towards the debt directly. When doing so, be sure to pay off the debt on time every month and strive to make more than the minimum payment required.

How to pay off old debt?

The best way to pay off old debt it to:

  • First gather a list of past due debts.
  • Negotiate settlement payments one at a time towards your debt.
  • Pay towards the debt slowly and regularly until the debt has been wiped.

How to get out of private student loan debt?

The best way to get out of private student loans is to:

  • Sign up for a forgiveness program.
  • Make interest-only payments towards the loan.
  • Apply for a forbearance if you are unable to pay the loan.
  • Negotiate for lower payments with the student loan lender.
  • Refinance the loan that will allow you to cover the cost for most of the loan amount.

What is Debt Consolidation?

While debt consolidation sounds simple, there are some important things to note before you get started. The following information answers questions regarding debt consolidation, what it is, and reasons why you may use it.

Your Title Goes Here

Your content goes here. Edit or remove this text inline or in the module Content settings. You can also style every aspect of this content in the module Design settings and even apply custom CSS to this text in the module Advanced settings.

What is credit card consolidation?

Credit card consolidation is a new loan where you take various debts and roll them into a single monthly payment. For people with multiple loans or credit card accounts, this may make payments simpler or lower.

Should I consolidate my credit cards?

Whether you should consolidate your debt depends on your personal finance situation and the type of debt consolidation you wish to do. Consolidating with a loan could reduce your payments, but a longer term could lead to paying more in interest.

What is the best way to consolidate credit card debt?

The best ways to consolidate debt includes keeping your balance low, managing your credit card debts, avoid moving around debt with a credit consolidation loan, and avoid opening several new credit cards.

Why consolidate credit card debt?

In an ideal situation, the reason why you would consolidate credit card debt is to have a single payment with a lower interest rate than your current credit card debts so you end up paying less in interest overall.

What is the best loan to consolidate credit card debt?

Secured debt consolidation loans are one of the best loan types. These loans generally have better interest rates than unsecured loans, but they use collateral, such as the equity used to secure a home equity loan.

What's the difference between credit card refinancing and debt consolidation?

Refinancing is simply moving your credit card balance from one card to another for a better pricing structure, which is also known as balance transfer. Debt consolidation involves taking all your debts and putting them together for one monthly payment at a specific interest rate.

Can you consolidate car loans and credit cards?

Yes, you can consolidate your car loans with your credit card loans. You may not wish to consolidate your auto loan as the loan typically has lower interest rates than consolidated debts.

When should I consolidate my credit card debt?

You should consolidate your credit card debt if your credit is in good standing and you can get a loan that has a lower interest rate than the current loans you’re paying off.

Can you consolidate credit card debt into mortgage?

Yes, either through refinancing your mortgage or taking out a home equity loan, you can turn your credit card debt into mortgage debt, but this does mean that you are putting your home up as collateral for the new secured loan.

How do credit card consolidation loans work?

Credit card consolidation loans work by taking all your debt and placing it under a single loan. Through this method, you only pay one monthly payment to cover your debts.

Can you consolidate credit card debt with student loans?

Yes, typically you can consolidate any type of debt. It is important to note that with consolidating student loan debt you usually only qualify for loans equal to the amount you’re currently paying off for your student loans.

How to consolidate high interest credit cards?

There are multiple ways to consolidate high interest credit cards, which includes working with a nonprofit credit counseling organization, opening a balance transfer credit card, or taking out a personal loan from a bank, online lender or credit union.

Can a debt consolidator freeze my credit card?

Yes, debt consolidation does include freezing your accounts by creditors. In exchange, the creditors agree to reduce and sometimes even eliminate the interest charges that are applied to your loan.

Services that Provide Debt Consolidation

Several services are available that allow you to consolidate your debts. There are multiple loan types to choose from when it comes to debt consolidation and many lenders offer it as a service. The following answers questions on whether these major lenders have debt consolidation services available.

Your Title Goes Here

Your content goes here. Edit or remove this text inline or in the module Content settings. You can also style every aspect of this content in the module Design settings and even apply custom CSS to this text in the module Advanced settings.

How to consolidate credit card debt on your own?

If you have a good enough credit score, you can consolidate credit card debt on your own with a balance transfer credit card that moves your debt into a single place. You can then pay off debt in one area.

How to consolidate credit card debt with Chase?

You can consolidate credit card debt with Chase through a balance transfer. The balance transfer with Chase currently offers a 21-month 0% interest period, but you cannot transfer balances from one Chase card to another.

Will Capital One consolidate credit cards?

Yes, Capital One can consolidate credit cards. Through balance transfer, Capital One can take your credit from other lenders and place it under one loan to make your payments more convenient.

Do credit card consolidation companies work?

Credit card consolidation does work if you are properly prepared. It’s said that people should only do credit card consolidation if they have a steady amount of income and the consolidation leads to a lower interest payment overall.

Does Bank of America consolidate credit card debt?

Bank of America does offer debt consolidation. There are no annual fees and you can secure a loan of up to $25,000 with an interest rate as low as 9.49%. Some also consider them the best online bank account option available.

Can I consolidate credit with Discover credit card?

Discover does allow you to consolidate your debt. While other rates can rise, Discover allows you to lock in a fixed rate, which means that your monthly payments will not change.

How Debt Consolidation Impacts Your Credit

Getting out of debt can have an impact on your credit. Overall, debt consolidation can positively impact your credit, but there are instances where your credit score could go down temporarily. Check out our answers regarding how debt consolidation impacts your credit.

Your Title Goes Here

Your content goes here. Edit or remove this text inline or in the module Content settings. You can also style every aspect of this content in the module Design settings and even apply custom CSS to this text in the module Advanced settings.

How does credit card consolidation affect your credit?

Taking out new credit, even for consolidating debt, usually results in your credit score being lowered slightly because of the hard inquiry required to obtain your credit score, but overall it may raise your score.

What impact did consolidating credit card debt have on individuals?

Consolidating your debt may cause a temporary decrease in your credit score, but it may also lower your monthly payments. The impact consolidation has on your credit depends on your approach.

How to consolidate credit card debt without hurting your credit?

If you want to consolidate your debt without hurting your credit, you need to leave your credit card accounts open after you pay them off. Your credit rating can go down if an underwriter is concerned with you racking up new debt.

Does debt consolidation close credit cards?

No, debt consolidation does not close your credit cards. The only thing that consolidation does is reduce your balance to zero or change the way your cards work. If you want to close your card you must do it yourself.

Can I consolidate my credit card debt with bad credit?

You can consolidate your credit card debt if you have bad credit, but the interest rate may be high, which could make it more expensive if it takes a significant amount of time to pay off the debt.

Will consolidating credit card debt improve credit score?

Yes, consolidating credit card debt can improve your credit score by helping you pay off several cards with big balances and helping your utilization ratio. Consolidation may initially cause a temporary dip in your score though.

Jordan Beaumont

Jordan Beaumont

Financial Guru

Jordan's work focuses on helping people reach their financial goals so they can spend more time with family and friends and less time worrying about their budget. After finishing college with a degree in Accounting and Communication, he realized that these are the most important things in life and that people shouldn’t miss out because of money.