It's early in the year and you realise you may have got carried away using your credit card with Christmas and the post holiday sales. While your debts may seem like they can't be managed you don't have to live we've these debts hanging over you. By taking control of your finances and sticking to a few rules you can permanently eliminate your credit card debts. Below are some tips to help reduce your credit card debt fast.
1. Make a list
One of the first things you will need to do to ensure debt reduction is to list out all your existing credit cards descending order of interest rate. That means the card with the highest interest rate must be listed topmost followed by the other cards.
2. Assess the minimum payment percentage
Next you need to find out the minimum payment percentage from the fine print on the credit card documents. Make sure to add up all the minimum payments on each of the credit cards. This is one of the first steps towards debt consolidation efforts.
3. Check your affordability
Next you will need to ascertain how much you can shell out each month. Make a list of your current expenses versus the income you are receiving. If you want to permanently eliminate credit card debt you'll need to find mays to save money as part of your household budget in order to pay off the outstanding balances.
4. Payment methods
For all the other credit cards, excepting the one with the highest interest rate you should make an effort to pay off the minimum balances on each card. This is the way to acheive debt consolidation. On the card with the highest interest rate, in addition to the minimum amount pay off an additional amount to reduce debt.
5. Pay off the highest rate card
Even before you start paying off the outstanding towards other cards make sure to pay off for the one with the highest interest rate. By doing this you can avoid too many costs towards this high rate of interest. This is one way to go about debt reduction successfully.
6. Request for lower rate
The credit card market is so competitive that if you request for a lower rate from your creditor you might just get it! Lower rate means you can get rid of credit card debt that much faster!
7. Do a balance transfer
You'll be surprised at how much savings a balance transfer can actually make for you! Look for a card with a much lower interest rate. Then transfer all outstanding balances to the new card. Now you just have a single payment every month at lesser interest rates! That's a great way to ensure debt reduction.
8. Make a promise
You need to promise yourself that you won't use the card for anything else other than emergency situations. If you stick to this resolution you will be sure to save a lot and get rid of credit card debt much faster.
9. Use your savings
Make sure to use up the money in your savings account to pay off the outstanding balances as much as you can. This is the fastest method of debt consolidation.
10. Read the fine print
If you plan on going for a new card with a low interest rate, read the fine print as most of them are promotional offers. Know what the rate is after the promotional period.
Credit card debt reduction starts with reduction in the expenditures you make using your credit card. So, the first trick for credit card reduction is to go for shopping without your credit card (carry some small amount of cash). This credit card reduction technique isn't asking you to stop shopping, instead it's just asking you to seriously evaluate the need of anything you want to purchase and not just purchase it on the spur of the moment. So, if you really-really need to buy it, you will go back to your home to fetch your credit card thus introducing a delay that is instrumental in killing spur-of-the-moment purchase (and hence helping in credit card debt reduction). It gives you time to evaluate if it's really worth going back home and getting the credit card for purchasing that item. So, in this case, credit card debt reduction is achieved by preventing the debt from building up further. It's a very effective credit card debt reduction measure.
The other effective way of credit card debt reduction is debt consolidation i.e. consolidating debt from high APR credit cards to a low APR one. So this credit card debt reduction measure works by reducing the rate at which your credit card debt grows. Moreover, this way of credit card debt reduction also gives you a breather in the form of a short initial period when the APR is 0%. Besides credit card debt reduction, debt consolidation also brings some additional benefits which are basically in terms of rewards etc offered by the new credit card supplier. Thus this method of credit card debt reduction is really more than just a credit card debt reduction method - it's a benefit provider too. If you are not comfortable in taking forward this method of credit card debt reduction, you can seek the help of a credit card debt assistance company.
Besides these two credit card debt reduction measures, which are really the most important credit card debt reduction measures, there are other methods too for credit card debt reduction. Another one is to ask your current credit card supplier for help in credit card debt reduction i.e. by lowering the APR. It might work out for you (as it does for some people). Also remember, that there are people (professionals) out there who provide advice on credit card debt reduction (just in case you need them).
Both Richard Greenwood & Julia Sinan are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Julia Sinan has sinced written about articles on various topics from Credit Cards, Finances and Debts Loans. To read about and. Julia Sinan's top article generates over 90500 views. to your Favourites.