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CC Debt Relief Plan – A Tutorial

Introduction to the Plan

The best way to find some credit card debt relief is to seriously sit down and gather all your information as to how many credit cards you currently have, which ones you use the most, and how much debt you’re carrying on them. I suggest never having more than three credit cards on the go at one time, but I’ll get into that on another day. Today we are laying out this step-by-step tutorial on how to shed off your bad CC debt.

What you need now is some sort of relief from the every day stress involved with carrying so much high interest debt. Your average credit card has an 18% interest rate, which could be rolling over every month, causing even more debt building – you must get these cards under control, or canceled, ASAP.

Canceling High Interest Credit Cards

All financial experts will tell you that one of the warning signs that your debt is out of control, and your credit card debt is becoming unmanageable, is when you are paying down a credit card balance with a cash advance from a different credit card. This is true, but sometimes this is what you have to do.

It is likely that one of your credit cards has a lower interest rate than all your other cards, so before you shop around for any debt relief companies, you need to put all your debts on to the one card that has the lowest rate on it. That is step one. Likely you will have to transfer all your debts on to more than one card, and I suggest that you choose your three lowest rate cards to do that with. Once you have picked the three lowest rate cards, go ahead and move all your CC debts to the three cards, clearing off the balance of all others. Once you have “zeroed out” all the other cards, it’s time to close those accounts.

Call up all of the highest rate credit card companies (these are the cards you zeroed off) and tell them that you have paid off the balance(s) to zero and you want to close the account and cancel the card(s) all together. They will likely try and talk you into keeping their card, so they can make even more money off your wild spending habits – you must resist and insist. Go ahead – you can do it – close them down!

Only Three Credit Cards Left

So now you should have only three credit cards left – hopefully anyway. You may have four left, but get the number as low as possible. Keep in mind of course, that having only two active cards is an even better way to go, because when you shop around for some debt relief you will have an easier time with it.

Difference Between Debt Consolidation and Credit Card Relief

Not really that much, but there is a difference. Usually, a debt consolidation means you are combining your debts (like vehicles, credit cards, personal loans, etc.) into one larger debt with a lower interest rate, and then paying that down over a longer period of time – that is the ultimate goal here.

With credit card debt relief, you are simply paying off all your CC debt with one cash loan from the bank (lender) at a much lower interest rate that you had on the cards combined. The only real difference in the loan you’re getting approved for from the lender is the interest rate. Depending on your credit bureau reports and your repayment history (with past and current creditors), your interest rate on the debt relief program will vary. With a debt consolidation, the lender may have some security on the loan because of vehicles (RV, motorcycle, car, truck, boat) making your interest rate lower than a cash loan for credit cards. Make sense?

Time to Shop Around for a Debt Relief Loan

Now that you have successfully moved all your debt to as few cards as possible (in our example – 3), you need to shop around for some debt relief offline. I would try applying with the bank you currently deposit your paychecks, or business income, into first. The same bank you may have a 401K registered with, and/or car loan, and/or home mortgage. Your best chance of getting a low interest rate is the bank that already has a piece of your wallet. I know this sounds crazy coming from a writer on CLF which is an online loan website, but we’re not here just to make money – we’re here to give you the best advice possible. So try your bank first, then if that does not pan out, try another local bank. Your last resort should be an online lender.

Schedule a Meeting With a Loan Officer

Go ahead and schedule a meeting with a loan officer at your bank, and don’t give away much information on the phone, except that you want to talk about a loan. Make it vague because you just never know what the secretary at the bank is going to say to the loan officer, or what she (or he) is going to write on a sticky-note and post on the loan officer’s computer screen. Keep all borrowing discussions private – between you and the loan officer – no-one needs to know what you are borrowing money for. Now, a couple of preparation points that are important;

  • when you get to the day of your meeting with the loan officer, make sure you clean up nice. It’s OK to dress in a casual manner, but don’t look messy or half asleep. Clean up your hair and face and look presentable.
  • next, before your meeting, gather up the most recent credit card statements for the remaining cards (as discussed above) and keep them neatly in order. No coffee or food stains allowed, OK.

When you are finally in their office (or cubicle) shake their hand and introduce yourself. Let them do the same. They will usually start off saying something like, “How can I help you today”?

Don’t worry about being bashful and nervous – they see this all the time. You can start off by telling her (or him) that you are finally getting your credit card debt under control and you need some relief from the huge interest rates. Tell them all about how you got rid of the highest interest credit cards, and how you lumped and combined all your debt on to the lowest interest rate cards. This won’t impress them, but it will make them realize you are finally starting to “do the math”, and perhaps “a light is coming on in your head”. Perhaps you are starting to take full responsibility for your personal finances and spending habits.

Tell them you wish to apply for a CC debt relief loan with the lowest interest rate possible, and that you would like to have only one credit card with their bank with a small limit on it (around $1000 to $3000) when you are done. Tell them that you are closing and canceling all other credit cards after you have been approved for the loan.

Then the fun begins – well maybe not so much fun, depending your situation.

Interest Rates on a CC Relief Loan

Interest rates can run quite high (relative to a car loan or student loan) when you need a cash loan for CC debt relief, because you may have a bad credit rating already, and you may not have any equity in a house or vehicle to put up as collateral. These would be called home equity financing and car title loans respectively. Getting approved for any kind of no collateral loan will cost you dearly due to high interest, and that is the kind of loan you will be getting approved for today.

Here is your CC debt relief breakdown today;

  1. American Express CC Debt = $4587.86 (interest rate = 18%)
  2. Visa Card CC Debt = $3492.45 (interest rate = 21%)
  3. Mastercard CC Debt = $1246.34 (interest rate = 16%)

You are currently only paying the minimum payment on each card and the interest is building every month. These interest percentage rates are know as APR (annual percentage rate) so this how much interest you are currently chalking up every year when just paying the minimum amount. Usually the monthly minimum payment pays for your interest and and tiny portion of the owed principal. For the sake of these calculations, we are going to assume your monthly minimum payment ONLY covers your interest on the principal.

  1. American Express: APR 18% on $4587.86 debt = $825.81
  2. Visa Card: APR 21% on $3492.45 debt = $733.41
  3. Mastercard: APR 16% on $1246.34 = $199.41


Total interest payments for one year on these stagnant credit cards is a whopping $1758.63 – and the worst part is that you still have not paid off a single dime of the principal owing!

Now you want to calculate what your CC debt loan will cost you in interest each year – assuming you were paying the CC loan down over a 3 year period. When we add up your total credit card debt it comes to $9326.65. Curious how it came out to being a debt close to ten thousand dollars. Now we figure out how much a 3 year loan will cost to clean up this mess – once and for all.

Debt Relief Loan Amount: $10,000 loan (keep the remaining $673.35 for a rainy day – why don’t you?)
Length of Time for Repayment: 3 years
Interest Rate: 8% (being generous here and this varies depending on your credit score, etc.)
Payment Freq. (biweekly or monthly): monthly installment payments

CC Relief Loan Using Our Calculator

You will find a loan calculator at the bottom of this article, and that is one I am using for your calculation.

Loan Calculation Results
Total amount to be paid over the three year term: $11,233.10
Total amount of interest to be paid over the three year term: $1,233.10
Monthly Payments: $307.76


See how your credit card debt has been wiped away – now that is a huge relief and a load off your mind right. Feels good to have all that high interest, bad debt gone for good. Your muscles will begin to relax now, and your sleep will start to improve.

All totaled, you have paid off all your credit cards and your credit rating has been improved because you got rid of all your cards but one (the American Express card you have with the same bank that gave you the consolidation loan).

The interest you are paying on all this debt is FAR less, and you have been set free from the stress of growing CC debt. Now, this is where you have to get REALLY smart about it. You need to keep that one low limit credit card that you have, and never get another one. Never even consider another CC. Don’t apply for department store cards either. No gas cards. No plastic of any kind. You need this one CC you have for traveling, or buying something online, but that is it! Don’t go off on a spending spree and max out this one credit card you have. Get smart and get disciplined about your personal finances.

So that concludes our tutorial on a CC consolidation loan – also known as a debt relief loan. Please comment below.