How can I Reduce Credit Card Debt?

Mounting credit card debt is a common problem facing consumers. With a careful plan, you can reduce credit card debt and remove the stress that comes along with it.

The most important step you must take to reduce credit card debt is to stop using your credit cards. It's common sense that the larger the debt is, the longer it will take to pay it off. However, only paying cash for all of life's needs can be a scary proposition.

Cut up all of your credit cards so they're not available. If if makes you feel more secure, you may want to keep one card for emergencies. But give it to a family member, freeze it in a block of ice, do something so that you have to consider whether it's truly an emergency.

Now that you're not adding to your debt through spending, decreasing the interest that accrues every day is the next way to reduce credit card debt. Look for the credit card with the lowest interest rate, and consolidate your debt. Call your credit card companies and see if they can offer you any special rates if you transfer your balances to them.

Also look into new credit card offers that offer no or low interest on starting balances. This is the one case where opening a new account would be permissible as you work to reduce credit card debt, but cut the card up immediately so you're not tempted to use it.

Once you have stopped increasing your credit card debt, it's time to pay it down. First, you absolutely must pay more than the minimum payment. Then you must devote as much of your income as possible to getting out of debt.

Create a budget, set goals and look for ways to live more frugally while you pay off your credit card balances. You could pick up a part-time job, ask to work overtime, stop eating out, or sell some unwanted items in your home. If you're committed to the process, you can reduce credit card debt, even if you do it one dollar at a time.

If you find that you are unable to reduce credit card debt on your own, consider using a credit counseling service. They will be able to work with you to create reasonable payment goals and depending on the service, may be able to consolidate your debts or provide other services.