How To Get Out Of Credit Card Default

The bad news first. You’ll have to make payments on time for at least six to 12 months.

Or, you can choose to do a balance transfer to another lower rate Credit Card. You should do a balance transfer only if you have enough available balance [credit] on the card that you are transferring the balance to. If you don’t have enough available balance on another card, transfer as much as you can without going over your credit limit.

For instance, if you have a $4,000 outstanding balance on one card at 32.24% interest and a card with $4,000 available credit with a balance transfer rate of 6.99%, transfer only $2,500 to the new card. This way, you will be saving thousands of dollars in interest keep your second card from being maxed out.

Look for balance transfer rates that stay low for the life of the balance transfer. Most promotional balance transfer offers usually last for only six to 15 months and then the interest rate jumps up to a mystery rate. But no worries, as long as the new rate is below the default rate, you’re better off. Remember, you’ll still be paying the interest first, principal second once the promotional balance transfer period is over.

The key is to not stay in default on your cards any longer than necessary. If you have to make your payments on time, even if that means making only the minimum payment.

Your ability to come out of Credit Card default is based on time – not money. If your Credit Card Company can keep you paying three times the money for six to 12 months longer, they will. Some people think that if they make a big enough monthly payment they will come out of default with their Credit Card. Not true. Get out of default as soon as possible.

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