The global recession in the last couple of years has left many with uncleared credit card debt
. Credit card debts are really stressful simply because of the high rate of APR charged by the financial institutions. Financial institutions, knowing that people are struggling due to the credit crunch have treated card debt as a cash cow milking it for all its worth. They have cut interest rates but still the APR rates charged for customers are very high.
With card debt one shouldn't give hope as there are number of solutions to clear such debts. But the main thing here is to act now rather than later as the increasing rate of interest will bring further financial problems.
First of all there should be a proper debt management plan which helps to freeze interest and stop creditor harassment. Then the monthly minimum payment should be made in excess which will help in clearing debt in a shorter period of time. Otherwise just paying 2% payment monthly will take around 40 years to clear the balance.
Saving is another too that should be used to clear credit debts. Since the saving accounts fetch a mere 4-5% interest against a skyrocketing 18-20% credit card APR it is unwise to leave money in the savings account. Whatever money is there in the account use it to pay the debt. High competition among financial institutions has also brought 0% APR credit cards in the market, just get one for yourself and transfer card balances across to take full advantage of these offers.
Another effective way to tackle credit debt is consolidating loan, which helps to set a clear target in releasing credit card debts and the monthly payments will also be less, but consolidation loan carry very high interest rates and should only be opted for if you have enough back up funds.