Pay on Your Own
Eliminating your credit card debt on your own may be a viable option, but it really depends on what you can afford. Here are 3 options for handling your debt on your own:
1. Pay It Down Immediately
If you can afford to throw a couple of paychecks at your debt and get rid of it as quickly as possible, then that's the best option for you. Unfortunately, if you could afford that you probably wouldn't be here looking for help.
2. Make the Minimum Payments
You could continue to pay the minimum monthly payments, but if you have a significant amount of debt it can take years to reduce your principle balance. This is especially true if you have a high interest rate. Check out the Debt Shield Debt Calculator and find out approximately how long it will take you to get out of debt and how much interest you will pay if you continue paying the minimums.
If we assume you have an 18% interest rate and the minimum payment amount is calculated at 2.5% of the total debt, it can take you...
- 26 years and $14,231 in interest to repay a $10,000 debt
- 32 years and $29,231 in interest to repay a $20,000 debt
- 39 years and $74,231 in interest to repay a $50,000 debt
Interest rates can go as high as 39.99% and often, creditors can raise rates at any time. Moreover, they are likely to raise rates if you ever fall behind in your payments. You can see why credit card companies choose to keep the minimum monthly payments relatively low compared to your principal balance. Creditors tend to earn the most profits when customers pay the minimums because they make so much from interest. However, paying only the minimums is rarely the best option for cardholders.
Until you pay off these debts, your ability to get any other credit may be hindered.
3. Don't Pay Anything
If you already stopped making payments to your creditors, you are destroying your credit without eliminating any of your debt in the process. Ignoring your debt will only make it harder for you to get debt free.
Continuing to pay only your minimum monthly payments may not be a smart financial decision, so if you cannot afford to reduce your principle balance by paying more than your monthly minimums, then you may want to consider enlisting outside help.
To find out if you qualify for debt settlement, please fill out our form for your Free Consultation or call 1-888-397-7546.
