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. Continuing to pay your minimum monthly payments is usually not a smart financial decision, so if you cannot afford to reduce your principle balance, then you may want to consider enlisting outside help.
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.
Make the Minimum Payments
You could continue to pay the minimum monthly payments, but you will pay nearly 50% of your original balance in interest alone over the first 3 years. You wouldn’t make a dent in your principal balance.
Interest rates are usually 15% or higher and creditors can raise rates at any time. With a higher interest rate, it would likely take you between 20 to 40 years before becoming debt free. If your interest rates are 25% or higher, it is literally impossible to pay off your debt by making minimum 2% payments; your payments would not be enough to cover the interest and as a result your balance would increase instead of decrease. (You can see why credit card companies choose to keep the minimum monthly payments relatively low compared to your principal balance. This is how they make their money.)
Until you pay off these debts, your ability to get any other credit is substantially hindered.
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.
To find out if you qualify for debt settlement, please fill out our form for your Free Consultation.
