So many people write to me asking me what options are available to them for paying off and eliminating overwhelming credit card debt. There are different options available depending on if you’re behind on your payments or how severe your situation is - Read on, as I’ve listed them in an easy to understand manner. Above all, whatever route you take, make certain, the company you work with is credible and reputable and ultimately, one you trust! You can feel free to email me at coach@debtfreediva.com if you have questions or need further information on recommended companies to work with.

Credit card debt is overwhelming and often hard to stay on top of. There are a number of options people can turn to and so you’re aware, here are the options available:
Bankruptcy
Consumer Credit Counseling/Consolidation
Debt Settlement/Negotiation
First Mortgage Refinance
Home Equity Lines of Credit
Unsecured Consolidation Loans

The first three options are considerations when you’re considerably behind on your payments and you feel you can’t turn the situation around on your own. Chances are, you’re already in a situation where your credit rating has been tarnished. As I said, I will go into detail about options 1-3 at a later date.
If you own a home, I recommend you explore the possibilities of refinancing your mortgage or obtaining a home equity line of credit. Not only will your interest rate and payments be lowered, allowing you to put more towards the principal reduction, the interest you pay will be tax deductible. If you don’t own a home, you could do one of two things: talk to your bank or credit union about an unsecured consolidation loan that is on a fixed term with fixed monthly payments. In this case, the interest will not be tax deductible but you will know exactly how long it will take for you to become debt free. In addition, you could talk to the credit card companies and negotiate lower rates. If you’ve made your payments on time, there’s really no incentive for the credit card companies to work with you as you’ve not demonstrated any financial hardship or inability to repay. Be aware that minimum payments credit card companies require you to pay has gone from 2% of the outstanding balance to 4%.

Once you’ve determined the best route to take, here are 4 things you must do- (this usually will apply if you’re looking at options 3-6)

Determine how much money you can free up each month to add to the principal reduction - what I call "Debt Detonator Dollars"!
Identify and change the negative habits and emotional patterns that got you into this debt. If you don’t change your behavior, the debt will come back.
Plan something to look forward to in the future as a reward for paying off your debt. Once you’ve decided how long it will take to eliminate your debt, you can plan on a reward for the short, medium and long term. It doesn’t have to be big or expensive, it must be something that brings you joy!
Once you’ve paid off the debt, take that same payment and put it towards your future. For example, by investing $700 per month for 10 years, averaging a 6% return, you’d accumulate just under $115,000. Now that’s something to look forward to!

Above all, remember that this debt in no way defines who you are as a person. Building a strong sense of self worth will serve to increase your net worth!

Again, feel free to email me with your questions at coach@debtfreediva.com
Dee Dee Sung, The Debt Free Diva www.debtfreediva.com