Credit Card Commandments to Get Out of Debt

Pay Down the Expensive Debt First

First pay down the high-interest-rate debt, even if it’s the least amount of money you owe. If you must, just pay the minimum on the home equity loan while you aggressively eliminate the credit card debt. You’ll save a lot of interest in the long run.

Free Debt Counseling

If you feel as if you’re sinking under a tide of red ink, try calling the credit counseling service in your community. They’ll work with you to come up with a realistic budget to eliminate debt, and sometimes they’ll even contact your creditors to negotiate a break on interest

Drowning in Debt? Ask for a Life Raft

If you owe so much money on your credit cards that you’re seriously considering bankruptcy, chances are the credit card companies will strike a deal with you. Here’s what you have to do: Start calling the phone numbers on the backs of your credit cards. The credit card company may be willing to lower the amount you owe, rejig the monthly payment plan or eliminate interest payments on a long-term basis. If you did declare bankruptcy, credit card companies would usually be left holding the bag.

Pay Credit Card Bills Twice a Month

If you owe a lot on high-interest-rate credit cards, make a payment every two weeks instead of once a month, even if you’re just paying the minimum amount due. This will cut into the interest as it accrues. It may not seem like much, but over time, you’ll save a bundle.

Pay Credit Card Bills Immediately

While it’s wonderful that credit card companies give you a grace period before interest accrues on your balance, keep in mind that the longer you wait to make your payment, the more interest accrues on your previous debt. So don’t file that bill away for later—pay it at your first opportunity.

Resist Tempting Pre-approved Credit Card Offers

Credit card companies know how to ensnare new customers: Keep up that barrage of offers. Once you take the bait on a card and they have you, chances are you’re going to run up some debt.

Don’t Be Fooled by Zero Per Cent Introductory Rates

Here’s the snag: often that rate rises to 18 per cent or more after the six-month introductory grace period. Before you sign up, make sure you know what you’ll be paying down the line.

Put Your Penmanship to Good Use

Write legibly, because it’s perfectly legal for credit card companies to hold, reroute, and otherwise stall payments that they can’t read. They can do this for five days without having to contact you. If your payment due date passes in the meantime, tough luck.

Stop Writing Notes

Don’t write notes to your credit card company and enclose them with your payment. Companies are allowed to take the notes, along with the bills and cheques to which you attached the note, and reroute them back and forth to different departments for up to five days. It will give the credit card companies another few days to suck some interest charges out of you.

Can Yearly Credit Card Fees

Want that annual credit card fee waived? Simply dial up the number on the back of the card, and tell the rep that you don’t want to pay the fee any longer, and you’ll switch to a different credit card if you have to. Most of the time, the first customer service rep on the line will have the authority to waive or discount the fee.

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