How can I Reduce Credit Card Debt?

Lorna W.

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.

Those with many debts might turn to a debt consolidation company.
Those with many debts might turn to a debt consolidation company.

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.

Shredding credit cards so they are no longer available can help reduce debt.
Shredding credit cards so they are no longer available can help reduce debt.

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.

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The terms of a credit card declare its rates.
The terms of a credit card declare its rates.

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.

Creating a budget and setting goals can help someone live frugally while paying off debt.
Creating a budget and setting goals can help someone live frugally while paying off debt.

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.

It's important to track expenses when attempting to reduce credit card debt.
It's important to track expenses when attempting to reduce credit card debt.

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.

To start reducing credit card debt, a person should stop using her cards.
To start reducing credit card debt, a person should stop using her cards.

Discussion Comments

anon39750

Your article may be the only honest one on the Internet. Am I correct in deducing that there really is no way to pressure a credit company to reduce legitimate debt to them, as many companies claim?

sethhahn

Thanks for the advice.

Concise budgeting is something that many of us have a hard time with, but it's arguably the most wholesome way to approach our financial health. I don't like sticking to a budget, but it keeps me in check.

Seth

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