Steps For Reducing Credit Card Debt

Reducing credit card debt is not a simple process, especially since it is partly a matter of willpower. Paying with cash is becoming less and less common, and it's just all to easy to swipe that credit card. It doesn't take long for the balance plus the interest to start snowballing, so reducing your debt takes some serious planning.

The most obvious credit card debt reduction strategy is to spend less on your card. Sound simplistic, but this is really the key to getting rid of the debt. Unless you can suddenly bring in a lot more money to pay them off, the only way you're going to decrease the balance is by paying off more than you spend.

If you have a lot of credit cards, ideally you should get rid of all but one or two. These cards can be kept for emergency use, but don't use them for day-to-day purchases (or impulse purchases). Try to find the best interest rate possible on these cards.

Another option for reducing your debt is to take advantage of low-interest, or 0% interest offers. Credit card companies are always fighting for your business, and they often offer special rates for balance transfers from other cards. If you can get 3 or 6 months with no interest and make the biggest payments possible, your entire payment will go towards the balance on the card.

Ideally, you should think of this as a part-time job. Always be on the lookout for special offers, and try to coordinate them so your new card is coming right near the time the interest rate is going to increase on your current card. It won't always work out, but if you keep a watchful eye on them you'll be surprised how often you get these offers.

Compare all your cards' interest rates as well. If one card is offering you a significantly lower rate than another, you've got a couple of options.

First, if there's room on the card with the lower rate you can transfer some or all of the balance from the higher rate card.

Second, call the credit card company who has the higher rate. You can often get a better deal simply by calling and asking, and this is even more likely if you have a competing card that offers a better deal. Think of it like the "lowest price guarantee" that most stores offer.

Setting up an automatic payment through your bank is another way of reducing your credit card debt more effectively. If the end of the month comes and you have a choice between paying down your card or buying that new pair of shoes or new flatscreen TV, you're going to need to have some strong willpower.

If your bank automatically makes that payment for you, it's a lot easier to deal with because there's really no alternative.

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