How Can I Reduce My Credit Card Debt?

There is a credit crisis in America. It was created by credit and credit card companies and banks. You probably have experienced this crisis at least once. You have more debt than you have the ability to pay it back. It is possible to get out of debt but it takes, time and energy, willpower and discipline.

The Debt Counselors of America and the National Consumer Law Center offer these credit card debt elimination tips:

How to stay out of debt;

• Know the Fees.
  Know the annual fees, current interest rates, finance charges, cash advance fees and any other fees associated with your card. This knowledge can help you make better decisions on how to manage your card.
• Avoid Cash Advances.
  You should only get cash advances when it is absolutely necessary or never. The interest for cash advances is higher than for purchases and there are usually additional fees. Cash advances make you think you have more money than you do.
• Pay Cash
  If you can’t afford to pay cash, you probably shouldn’t pay credit. Remember you have to pay it back and that becomes a greater debt load. So if you are left with too much month at the end of the money it’s time to check your budget and spending habits, not borrow more.

How To Get Out of Debt

Go on Spending Diet Cut back on your spending, make a budget, include everything, and see where you can cut back with little or no sense of deprivation. Decaf soy latte’s cost $3.50 at specialty shops, if you get one every work day that will cost you $77.00 per month, make coffee at home. Spend the $77 on paying down a credit card.

Look For Low Interest Rates.

If you still have a positive credit rating try this. Find credit cards with low or no introductory interest. Use a balance transfer to move your balance to one of these. Pay more than minimum monthly and pay off the entire balance before the introductory rate expires. This can save you hundreds of dollar in finance charges. But only if you use the savings to pay down the cards.

Pay More Than Minimum Payments.

The minimum payment is a ploy by the credit card companies to get your money. If you pay the minimum only you could spend 15 years paying off at $1,500 debt that will have cost you $45,000 by the time you pay it off. Always pay off your account monthly, if not pay 1 and ½ times the payment. Also make sure your card company applies the extra to the principle not the next months minimum or you will not get the benefit.

Pay More Than Once In a Month.

If you have the money, pay more than once a month. Like the above hint it lowers your principle which lowers your finance charges. However, some cards will limit the amount of payments you can make per month so make sure there aren’t additional fees. Remember they are making money on you and they don’t want to make less. In addition it’s easier to pay $50 twice a month than $100 per month even if it’s the same amount.

If your debt runs out of control, seek credit counseling.

If you are still not making any headway, it may be time to seek help from Credit Counseling Services.