How Do I Eliminate Credit Card Debt Without Fees?

A credit counselor can help you develop a budget and manage money better.

A credit counselor can help you develop a budget and manage money better.

Accumulating credit card debt can be easy. Eliminating it is a lot harder. If you find yourself unable to keep up with growing credit card bills, dealing with the debt can put you under added stress. But no matter what your reasons for overspending, high card balances eventually catch up with you. Despite how much you owe, there are ways for you to get out from under the debt without incurring added fees. Your goal is to find the option that works best for you.

Negotiate payoff arrangements for any cards that have been charged-off or those which you can't pay off in full. Try to negotiate a repayment plan on your own without the help of a credit counseling agency. Begin by contacting the lender or credit collection agency that holds the debt. Explain your financial situation and ask if a payoff arrangement can be made with them. You may be able to get reduced payments or settle the debt for less than your current balance, although your credit score will drop. Offering a lump sum settlement may be your best opportunity for negotiating a payoff.

Pay more than the minimum balance each month on cards that are not delinquent. It can take a long time to eliminate a credit card balance if you only make the minimum payment due. Start by paying the most money on the cards with the highest balances. Always pay your monthly credit card bills on time to avoid late fees and added interest charges.

Transfer balances to a new credit card that offers zero percent introductory interest. These offers will only be available to you if you have good credit. Don’t transfer balances if the interest rate after the introductory period expires is more than you are currently paying. Pay down as much of the card balance as you can during that time. Bankrate.com cautions consumers to pay attention to whether a card company charges transaction fees. Use a credit card that doesn’t charge a fee to transfer balances.

Set up a household budget and stick to it. Compare your monthly income to all the bills you have to pay. Include credit card payments in your budget. Once you work out a budget, get in the habit of using cash rather than credit cards so that you aren’t adding new charges to your card balances.

Ask for help from a free consumer credit counseling service agency if you aren't able to manage credit card debt on your own (see Resources). Budget and debt counseling are among the free services many of these agencies offer. A credit counseling service may also be able to negotiate lower interest rates on your credit cards so that your payments are more manageable. While you're still going to have to pay back what you owe plus interest, a reduced interest rate can take off some of the pressure. Credit counseling agencies can sometimes negotiate to have late fees waived as well. Ask a company for references and make sure it is affiliated with a legitimate consumer advocate association. Find out exactly how the agency will be compensated by your creditors.


  • Consider the use of a debt settlement company only if you see no other way to get rid of your credit card debt as these services don't come free. Most charge a flat fee based on a percentage of your total debt amount. Debt settlement companies are geared toward individuals who are at least $10,000 in credit card debt. The way it works is that a company tries to negotiate a payoff arrangement with your creditor for less than your balance. One risk is that the company may ask you to stop making payments directly to the creditor. The settlement company then negotiates a reduced lump sum payment with your creditor. Even if the creditor agrees, your credit rating is going to suffer damage. Research several different companies to find those that are legitimate.

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About the Author

Amber Keefer has more than 25 years of experience working in the fields of human services and health care administration. Writing professionally since 1997, she has written articles covering business and finance, health, fitness, parenting and senior living issues for both print and online publications. Keefer holds a B.A. from Bloomsburg University of Pennsylvania and an M.B.A. in health care management from Baker College.

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