Credit card debt can become unmanageable almost before you realize what is happening. It is so easy to spend more than you should when you can use a credit card to make those purchases. It may be difficult, but it is possible to not only reduce credit card debt
, but keep your balance low after paying off your debt as well. Regardless of how it happened, if your balance has gotten out of control, there is no better time than right now to begin reducing your credit card debt.
• Get Organized
If you have several credit cards, list each one along with its balance, interest rate and minimum monthly payment amount. Pay as much as possible on the card with the highest interest rate and the minimum payments on the other cards to get the high-rate card paid off first. After paying off the first card, do the same thing with your other cards.
• Make a Budget
List your normal monthly income and monthly expenses, including payments on your credit cards. For annual expenses such as insurance and taxes, convert it to a monthly expense (just divide annual payment by 12 and add to list of monthly expenses). Write down the approximate amount you spend each month on discretionary things like eating out, clothing and entertainment. Determine whether you could cut back on some of your optional spending to pay extra on your card balances. See Debt Consolidation Calculator
• Take the Credit Cards Out of Your Wallet
The most effective way to lower credit card debt is to quit using your credit cards. To stop the spiraling debt, do not buy anything unless you can pay cash for it. If you want to keep your cards for use in the event of an emergency, freeze them in a large cube of water to make them less accessible. If you think you might be tempted to thaw them quickly in the microwave, ask someone you trust to keep the cards safe for you.
• Ask for Lower Interest Rates
Call each of your credit card companies to ask for a lower interest rate on your card. If you have been a good customer for them, they may grant your request in order to keep your business.
• Consolidate Your Debts
If you qualify for a low-interest loan at a bank or credit union, pay off your credit cards in that way. However, it may not be wise to use your home as security because you could lose it if you cannot make the payments. If you have a card with a low interest rate, consider paying off your high-interest-rate cards with the low-rate card.
• Get Help
Consumers seeking help to reduce credit card debt, are advised by industry experts to find a nonprofit, certified agency
with well-trained, certified credit counselors
. Here, you can expect unbiased, professional advice over a range of issues. People have their own unique financial circumstances, and professional counselors have wide experience with many different situations. Therefore, counselors may have valuable ideas that can help you choose the most effective methods to lower your credit card debt.
Paying off debt can give you peace of mind and a better credit score. After reaching your goal of reducing your card debt, determine that you will never charge anything unless you know you can pay your entire balance when you get the bill. It is much better to avoid credit problems than it is to resolve them.
InCharge Can Help Reduce Debt Now
InCharge is a leading non-profit credit counseling
agency that has an A+ rating from the Better Business Bureau, is accredited by the Council On Accreditation (COA) and is an active member of the National Foundation for Credit Counseling (NFCC). InCharge offers free budget and credit counseling by professional, certified counselors. InCharge counselors offer individual advice for developing and balancing budgets, managing money, using credit wisely, and building a savings plan. InCharge provided over 500,000 confidential free budget
and debt counseling
sessions during the last five years