Top Credit Card Debt Reduction Strategies

Top Credit Card Debt Reduction Strategies: If you find , like millions of Americans, that you have too much personal debt , take heart : You’re not by yourself , and there ways to reduce your debt. Credit card debt reduction, in fact, doesn’t have to be a dream, but an easy reality.

These days, the average American with debt holds more than $12,000 in debt on credit cards. (Of course, the debt we have from mortgages, car loans and other loans don’t count in this amount. ) For a lot of people, this causes them nostress , but the majority of people worry about the amount of debt they carry and for good reason – learning to control and eliminate debt is one step toward financial freedom, something many of us would love to attain.

In this article, we’ll look at several ideas for credit card debt reduction including nonprofit debt consolidation and options for free debt consolidation. Some may not work for you , while others will strike you as something you can try .

Let’s considerspending first.

To reduce your credit card debt, you will have to quit using them for purchases . This is atough one. Perhaps you pay some of your bills with your credit cards. You tellyourself it’s for the “rewards” like Disney Dollars and airline miles. But if using your credit cards for these purposes adds to your debt, you should pay anotherway. Stop any automatic bill payments that go on your credit card and use a debit cardinstead.

Many people fall into the trap of paying for things with their credit cards with the good intention of paying the charge back off when the bill comes, but when the bill comes , the balance often is not available. The credit card balance continues to increase as little more than the interest is paid down each month.

Reducing credit card debt means working towardreducing your debt , of course, but you can’t do that without working toward reducing your expensesfirst.

Once you quit using your credit cards for payments and activities that you have been accustomed to putting on credit , you also need to quit using your credit cards for day to day spending. That means if cash is short and you want tocatch a movie , you simply don’t go, if going means pulling out a credit card to pay for it. You forgo dinners out, and the new shoes you don’t really need.

If reducing debt is a priority then the things that have to be given up along the way will be worth it.

Once you have dealt with your spending , you need to deal with the debt . If you are only making minimum payments, find a way to increase the amount you pay . Financial experts say that if you pay 2% of your credit card balance each month – often the minimum payment is about 2% of your balance – it could take you 22 years to pay off a $1,000 debt!

If you double your minimum payment each month, you can cut down your overall repayment to 11 years instead of 22.

Increasing your payments might seem difficult , but when you see your credit card balances go down , you’ll be pleased with your efforts.

If you can afford to pay additional amounts , think about focusing on one debt at a time. If you have more that one credit card you are looking to reduce the balance on, or pay off, here are some tips:

* Focus on paying extra on one bill or credit card at a time, perhaps paying only minimum payments on the others.

* When you get extra money, say a tax refund , or a rebate, apply that toward the one bill you are working on.

* Put as many extra payments as possible on the one bill you are working to retire. You can make more than one payment per month. An online account linked to your checking will allow you to easily make your payments.

* Look for ways to make additional money strictly to pay down debt. Sell some old items online or if you are really serious take a part time job delivering pizzas or as a waiter or waitress.

As each debt is finished you will feel more in control of your finances and the payments that you no longer have can be used on existing debt to reduce it even faster . This is known as the "debt snowball" method of debt repayment.

Create positive financial habits and make paying off the debt a game. Find enjoyment in saving money by turning off unused lights around the house and saving money with the thermostat. You will be amazed how quickly you can eliminate debt when you focus on it.