How To Eliminate Unsecured Credit Card Debt

Knowing how to eliminate unsecured credit card debt will help you to improve your credit score and get out from under the stress and burden associated with mounting credit card debt. These economic times has forced many people to rely more on their open lines of credit, including their credit card balances, as a way to meet certain obligations and pay bills.

The ability to effectively manage, reduce and eliminate your unsecured credit card debt will open the path to new financial opportunities later on. In order to begin, follow these simple steps to eliminate your debt.

Step 1: Gather All of Your Debt

Gathering all of your current credit card statements and documenting your balances is a good start to eliminating your credit card debt. This information can be recorded on a ledger plan or entered into a spreadsheet or other budget monitoring software. Using a computer helps you break down your unsecured credit card debt and get a picture of where your spending is directed.

You should purchase a spand-o-flex or accordion folder that has 31 numbered tags. These tags represent the days of a month and it is a handy way to organize your credit card receipts by the day of the month the purchase was made. At the end of the month, your can review the receipts and see when you choose to use the unsecured credit card the most.

Step 2: Determine If Older Debt Can Be Reduced

Outstanding balances that you have been carrying for a period beyond 60 to 90 days are deemed bad receivable by the credit card issuer. This type of debt is expensive for you as you are serving the debt in interest charges that are increasing each month the bill is outstanding. You should attempt to contact the issuer and see if they may be willing to accept a lower amount in order to discharge the item. In some cases, the issuer may be willing to work with you and accept a lower amount in order to remove a bad collection from their books or avoid having to pay a bill collector.

Step 3: Determine if the Debt Can Be Consolidated

For those current and outstanding items that cannot be reduced through negotiation, you should attempt a bill consolidation. This can be accomplished either through moving the balances from your high interest unsecured credit cards to the lower interest one. This will close the high balanced cards out and place all of your debt on to one card, reducing your overall interest charges and lowering your debt. This step saves you money and moves you closer to debt elimination.

You should be aware that closing old accounts will result in a lowering of your credit score so you should consider this step carefully.

Step 4: Establish a Payment Plan

You may be able to negotiate a plan with the issuer to pay the amount of any outstanding balances on your unsecured credit cards in small payments over time. Although you are still incurring interest charges on the outstanding balances, you can at least make a sizeable dent in your debt.


While any of these steps will work to move you closer to eliminating your unsecured credit card, the one thing that will stop any of these steps from working is your inaction. Take the appropriate steps to address your credit card debt immediately and work directly with the card issuer or a debt settlement company to make suitable arrangements.

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