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How to manage excessive credit card debt?

An average American household holds $7,875 in debt. The purpose of maintaining a credit card is definitely not to pay excessive and unnecessary interest on everyday purchases but to save and invest money. You need to know if you have too much debt on your credit cards. Some indications are that you are only playing the minimum payment due every month. Also, if you have to pay credit card bills with another credit card, or have received a credit-limit reduction although you never requested one.

Credit card debt has a significant impact on your FICO scores, that generally range from 300 to 850. They’re affected by prominent factors such as number and type of credit accounts, credit to debt ratio, length of credit and payment history. On the top of that, every credit inquiries outside the period of two weeks bring down the credit scores.
Some specific strategies must be put into implementation in order to minimize or pay off the credit card debt. You can possibly use some of your savings because a lumpsum settlement would give financial liberation. If you have a brilliant credit history, you can request your credit card company for lowering of interest rates on the existing cards. Even if you have a whopping debt, you should attempt to pay more than the minimum debt because if you pay with the same pace, it would take unendurably long. In addition to that, you can transfer the debt to the lower interest cards. The trajectory of payment should be incremental where you should make payments from the lowest to highest credit card debt.

All these methods are indeed helpful, however, in case of an inconclusive and optimized idea, you can think of professional debt settlement assistance. There are many debt settlement companies that negotiate on the behalf of their clients and can reduce debt by even 50 per cent. Although it might have an effect on credit scores, it can avoid any future bankruptcy. As these companies don’t charge unless accounts get settled, it would be a fair and worthwhile deal.

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