Reduce Credit Card Debt

If your intention is to reduce credit card debt, here are a few steps you can take to help you achieve your goal as quickly as possible. This assumes that you are not able to consolidate your debts with a balance transfer to a card with a lower rate of interest.

Steps to reduce credit card debt:

1. Assess the damage – Round up all your debt on one sheet of paper, with those debts at the highest rates of interest at the top. These are the ones you need to attack first. Make a note of the minimum interest payments required.
2. Stop causing damage – Don’t use your credit cards any more. You can reduce credit card debt by not adding to it. Pay with cash or a debit card only. This will stop more water pouring into your boat as you are bailing it out. It’s your choice whether you cut your cards up or lock them away, just make sure that this particular love-hate relationship stays on the hateful side.
3. Pay as much as you can each month – Don’t just pay your minimum payment. A $2,000 debt at 20% with a 2% minimum payment will take over forty years to pay back, and cost over $5,000 in interest if all you ever pay off is the minimum amount. Add $50 each month and the debt is gone in three years with just $500 interest to pay. As you reduce credit card debt, so too does the minimum amount become less, but do not drop your payments in response.
4. Use extra cash to pay down the balance – If you are feeling flush one month, use the extra to reduce the debt even more. Do not be tempted to reward yourself with a gift that will only add to your debt.
5. Roll over minimum payments – If you have several credit card debts, when one is finished, continue to set aside an amount as though that debt is continuing, only pay it towards one of your other debts as an extra payment. This is a great way to reduce credit card debt as fast as possible.
6. Use some savings – This decision should not be taken lightly, and you should never reduce your emergency funding to such an extent that you could not survive for several months if, say, you lost your job. However, if you have an excess in your savings account that you could spare, it will be better off paying down a credit card debt at 15% than earning you interest at 2%.
7. Keep your goals in mind – Keep a chart visible to maintain focus, and to help you keep track of how you are progressing.

Any or all of these simple steps can help to reduce credit card debt. Just remember that the time to start is now.

Related posts:

1. Tips To Reduce Credit Card Debt
2. 6 Ways to Reduce Your Debt
3. Credit Card Debt Reduction
4. Credit Card Debt Relief
5. Paying Your Way Out of Debt
6. How to Reduce Your Monthly Credit Card Bill Using a Balance Transfer
7. Debt FAQ

Editor's Choice: Our Top Credit Cards

Credit Card	Card Details	Interest Rate (p.a.)	Cash Advance Rate (p.a.)	Balance Transfer Rate (p.a.)	Annual fee	Interest free days (up to)
St George Vertigo	Editor's Choice: Low Interest Low 2.99% for 6 months (reverts to 11.99%) p.a. interest rate and balance transfer rate, from one of Australia's most respected banks.	2.99% for 6 months (reverts to 11.99%)	20.74%	2.99% for 6 months	$55	55
Coles Group Source MasterCard	The Coles Group Source MasterCard has no annual fee, a 0% p.a. balance transfer offer for 6 months, with a rewards program including savings on fuel and FlyBuys Points	19.74%	21.99%	0% for 6 months	$0	62
Bankwest Zero Platinum MasterCard	Editor's Choice: No Annual Fee Excellent introductory offer with a $0 annual fee for the life of the credit card and a 1.99% p.a. for 9 months on balance transfers	16.99%	16.99%	1.99% for 9 months	$0	55