Five Tips for Reducing Credit Card Debt

If you have owned a credit card in your lifetime, chances are that you have spent more on it than you could pay off once or twice. But many people charge up so much on their credit cards that they find themselves in a mountain of debt in just a short time. Paying off credit card debt for those consumers could take months or even years. If you are one of those people and you want to get out of debt, here are some things you can do to reduce your credit card debt.

Cut Up the Cards
You will never be able to pay off your credit card debt if you continually charge more on them. That’s why you should cut them up and throw them away. If you have the self-discipline, you can keep one in case of emergencies, but only use it for emergencies and nothing else. Start paying cash for everything and you will see how quickly your credit card debt gets reduced.

Pay More than the Minimum
You might think it’s great that you only have to pay $25 each month on a $800 credit card bill. But when you think about it, you could be paying twice or even triple the $800 by only paying the minimum payment due to the interest rates. When you pay the minimum payment and nothing more, you are not putting much money toward the principal. Try to pay at least twice the amount of the minimum payment to reduce your credit card debt faster.

Do Some Negotiations
Do you have late payment penalties and other charges on your credit cards? Do you have a high interest rate? If either of these are true for you, try negotiating with your creditors. Tell them you have having financial troubles and you would like a lower interest rate. Also, ask them if you can get some of the fees waived to lower your balance. They may not do this for you, but it never hurts to ask. In fact, it could save you thousands of dollars in the long run if they are willing to do that for you. Just remember – with so many people defaulting on their credit card payments, they are happy to work with the ones who want to pay their bills.

Stick to a Written Budget
When you make a list of your bills and compare it to your income, you have a better idea of what you can pay towards your bills each month. You should also list your expenses throughout the month and see where you can make cuts. Do you eat at restaurants a lot during the month? Do you have any luxuries that you can cut out? If so, make a few cuts and apply that money toward your credit card bills.

Increase Your Income
This might sound like it is easier said than done, but if you have a hobby or if you can get a second job for a short time, you can make a huge dent in your credit card debt. Even if you are just delivering pizzas a couple nights a week, you can make some extra money to reduce your debt. You will be surprised how fast the debt melts away once you get motivated to pay it off.