Easy Ways To Reduce Your Credit Card Debt
Doug Smith

Defined Tag: Credit Card Debt.

If you are only able to make the minimum monthly payment because of excessive credit card debt, you are not alone. We rely on credit cards so much as a fast and easy method of payment that it is easy to get into trouble. The credit card companies seem to want to keep us in debt, as they bombard us with increased spending limits, preapproved cards, and cash advance checks. If your credit debt is becoming overwhelming, you need to reduce it. Here are tips on getting rid of debt accumulated on your credit cards.

Take your Visa, MasterCard, Discover Card, American Express, or other cards and stop using them immediately. In order to heal your credit debt wound, first you have to stop the bleeding. You can put your cards away in a secure place, or even better, cut them up and shred them. Replacement cards are available within a few days if there is a life-threatening financial emergency. Pay cash for all your bills, or use your checking account debit card. You must absolutely stop increasing the credit balance on your cards.

Now you have to pay the credit debts that you owe. Get the latest statements from all your cards with outstanding debt on them. Write down each card, the total balance, the minimum payment, and the annual percentage rate or APR. Add the balances together, and add the minimum payments together too. That defines the degree of debt on your credit cards, and the minimum you must pay each month to reduce those debts.

One popular debt repayment strategy is to choose the card with the lowest balance. While continuing to make your other credit card payments, devote as much extra money as you can to paying off the debt on the low-balance card.

Let's assume you were paying $500 per month on the card with the lowest credit balance. When the debt on that card is totally repaid, start paying off the card with the second lowest balance. However, when paying off this second card, add the $500 from the first card to the second card's payment. This will accelerate the repayment schedule and reduce the time and interest to repay it fully. Continue this strategy for reducing the debt on all your cards until you have no more outstanding credit balances.

The goal for reducing credit debt is to pay as much extra above the minimum payment as possible, without adding more to the existing balance. By using this structured approach, many have found their credit card debt decreasing fast, and eventually disappearing.

Copyright 2008 by Doug Smith. All Rights Reserved Worldwide. Unauthorized Duplication Prohibited. Not Intended As Professional Advice.