Credit Card Debt Elimination Information

Tips for Dealing with Credit Card Debts

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Credit card debt elimination information is an important part of the credit improvement process because credit card debts can have a significant impact on your credit scores. Here's a few credit card debt elimination information tips to keep in mind...

Credit Card Debt Elimination Information
Credit Scoring

Keep your credit card debts below 20% of your credit limits to help improve your credit scores. One way to do this is to only use your credit cards to make essential purchases and pay the balance down to 20% of the credit limits each month.

For example, you have to buy groceries, gasoline, and household items each month anyway. So simply use your credit cards to make these purchases, instead of cash. Then use your cash to pay your credit card debts each month.

This will help your credit scores in two ways. First, your credit reports will reflect low credit card debt balances compared to your credit limits. This represents 30% of your FICO scores. Secondly, by using your credit cards for your regular monthly budgeted expenditures, your credit reports will reflect timely payments each month, which will help your payment history (35% of your FICO scores).

Again, make sure you don't just make minimum payments on your credit card debts. If you only make the minimum payment on your credit card debts each month, it can take up to 20 years to payoff your credit card debts. So always pay more than the minimum payment each month.

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Also, closing your credit card accounts will not improve your credit scores. It will actually lower your credit scores. If you want to stop incurring credit card debts without hurting your credit scores, simply cut up your cards instead of cancelling the accounts!

Card Credit Debt Elimination Information
Debt Elimination Techniques

There are several credit card debt elimination techniques that you can use to use to eliminate your credit card debts. A debt elimination plan is the most desirable approach to dealing with your credit card debts. However if you are financially overwhelmed and cannot complete a credit card debt elimination plan, you may want to contact your credit card companies to negotiate settlement of your credit card debts.

If you need to settle your credit card debts for less than the full balance, you may be able to negotiate with your credit card companies to do so. But usually, they require a lump sum payment to settle the account. Also, they may not agree to settle your credit card debts unless you are 30 days delinquent or sometimes even 60 days delinquent.

Credit Card Debt Elimination Information
Debt Settlement

If you need to settle your credit card debts, you may consider working with a debt settlement company. However, just know that they do not legally improve your credit and your credit scores may even suffer more. So make sure you understand how to select a reputable debt settlement company to work with.

Also, beware that there may be tax implications associated with settlement of your credit card debts. The IRS may consider the forgiven debt as income. So consult your tax advisor before negotiating settlements of your credit card debts.

Another credit card debt elimination information tip is to negotiate a stipulated judgment as an alternative for dealing with your credit card debts. Sometimes a stipulated judgment may be used to not only settle your credit card debt, but actually legally improve your credit in the process!

The final credit card debt elimination information tip is to consider bankruptcy as an option to deal with your credit card debts. If so, you should first learn more about how bankruptcy will affect your credit, credit repair after bankruptcy, and how to re-establish your credit.

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