How to Tackle Credit Card Debt
INTERVIEW ON THE PRICE OF BUSINESS SHOW, MEDIA PARTNER OF THIS SITE.
Recently Kevin Price, Host of the nationally syndicated Price of Business Show, interviewed Chris Kidd.
The snowball method was a big focus of this interview (below) and the one advocated by Chris Kidd and Kevin Price. The “snowball method,” simply put, means paying off the smallest of all your debts and loans as soon as possible. Once that debt is paid, you take the money you were putting toward that payment and roll it onto the next-smallest debt owed. Ideally, this process would continue until all of your debts are paid off. This approach is great for several reasons — it builds enthusiasm for the process of reducing your debt as you enjoy the victories along the way. And, as mentioned, it will provide you the funding for knocking off your next debt as you are no longer spending on the ones you conquered.RefinancingRefinancing your credit cards is a great option if you have a large balance, but you don’t want to pay high interest. Even paying 11% interest instead of 20% could save you thousands over time. You should consult a nonprofit credit counselor before deciding on a refinancing option.Refinancing your credit cards can also lower your credit score. Credit bureaus treat multiple inquiries as one, and inquiries spread over a longer time period have more impact. Also, remember that refinancing can temporarily lower your score, but it will increase with timely payments.Paying more than the minimum paymentIf you find yourself struggling to make your minimum payment each month, you may want to contact your credit card issuer to discuss alternatives. Late payments and collections can hurt your credit score. You can also speak to a credit counselor and ask about debt consolidation loans. The National Foundation for Credit Counseling has a list of certified counselors in your area.While it can be tempting to only make the minimum payment each month, this solution only helps you temporarily. By paying off your balance each month, you can avoid the consequences of a lowered credit score and save money in the long run.Reaching out to creditorsWhen reaching out to your creditors, make sure they understand the seriousness of your financial situation. You can start by contacting the customer service department of your credit cards and requesting to speak with someone in the debt settlement department. You should be honest with them and stress that you are having trouble making payments, but you want to try to get a reduced interest rate. Be sure to write down everything you discuss during the negotiation process.
Chris Kidd, who guides people towards financial independence, began his journey to becoming a millionaire while attending college, where he met his mentor. Chris, who disliked reading at the
time, was advised to begin reading. The first two books that he read were Rich Dad, Poor Dad and Cashflow Quadrant by Robert Kiyosaki. These books developed a new rich thinking in Chris’s mind, and before he knew it, Chris had achieved his goal of becoming a millionaire at 24. Chris has since read, authored, and co-authored books on financial management; served on various councils; and appeared on numerous radio shows. Now, Chris coaches others to achieve their financial goals. He believes the journey to becoming a millionaire begins in the mind. It all comes down to one’s beliefs and affirmations. To achieve your financial goals, you have to start believing them.
You can learn more about Chris Kidd and his coaching at www.ChrisKidd.com.
LISTEN TO THE INTERVIEW IN ITS ENTIRETY HERE:
