Estimated 6000 debt on high interest credit card….

I work in the credit industry and there are several ways you can go about tackling this. First off, take comfort in the knowledge that $6k is not a lot to owe, but if you don’t pay it the right way, it will become a long term problem.

Step one: contact your credit card companies and request that they lower your interest rate. if you have been a good consumer they will most likely lower the rate… if you have not been paying on time and look like a risk, they will put up a fight… no matter what, do not give up on the idea that you can lower your interest rate…

If you have been on time tell them that you are considering obtaining a different card, and unless they can lower the rate you are simply going to transfer your balance to a new card and cancel the account.

If you have been bad at staying on time with your payments – then its time to get current and stay current. After 6 months of being timely with your payments they will lower your APR.

next step is to develop a repayment plan… if you can out $200 per month toward the debt you should be done in under 3 yrs. I would suggest that you set yourself up to pay your bills on line using an auto bill pay system, most banks offer this service free of charge and it is a quick way to have your payments go out. Its also easy to track and manage. Set yourself up to pay every 2 weeks. ($6k means your monthly minimum is probably $120 – $135) try an set it so that you make this payment every time you get paid… the more money you can spare towards the debt the faster it will be paid off.

In the meantime you will also want to set up a household budget to see how much money is coming in and out of every dollar, how many pennies are being committed to bills. Once you know what you have to work with it will be easier to plan out the upcoming months.

If you have a lot of extra cash that you can put toward the debt, make sure that you also set aside a reasonable amount into your savings account (if you have $150 that you can send to your card – send $130 and put $20 into savings)

The reason that you want to put money in savings is that you will begin to build up solvency – meaning that you won’t have to rely on credit should some unexpected expense come up… (new tires, emergency repairs, etc)

Finally, once you have paid off the debts, DO NOT STOP PAYING- only change where you are sending the money… what I mean is, put that $150 into your savings account so that you can start building up a bit of a nest egg. Having accessable cash help to further stabilize your finances. Everyone should have at least 6 months worth of living expenses available to them in their savings account.

This is an emergency fund that will prevent you from going back into debt should you lose your job, have to move or encounter a large expense down the road (want to buy a home, etc)

There are several professional services that can help such as Debt Management and Settlement Companies, but if you are responsible and can handle taking 3 hours a month to look over your situation you don’t really need them. Always be proactive with your debts, always look for ways to save. With a little patience, self-control and determination you will be out of debt in no time.

Best of luck to you.