Do you have like millions of Americans, that you have too much personal debt , take comfort : You’re not alone , and there ways to eliminate 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. ( Home mortgages, car loans and student loans do not count in the averages. ) For a lot of people, this causes them no worry , 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 accomplish.
In this article, we’ll look at many solutions for reducing credit card debt 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 do .
Let’s talk about buying habits first.
To reduce your credit card debt, you will have to quit using them for purchases . This is a difficult one. Maybe you pay some of your bills with your credit cards. You try to tell yourself it’s for the “rewards” like hotel credits and airline miles. But if using your credit cards for these purposes adds to your debt, you should pay a different way. Stop any automatic 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 cash is not available. They then pay the minimum payment and their credit card balance continues to increase.
Credit card debt reduction means working towardreducing your debt , of course, but you can’t do that without working toward reducing your expensesas a primary focus .
Once you quit using your credit cards for bills and expensesthat you have been used to pulling out a credit card for , you also must stop using your credit cards for daily spending. That means if cash is short and you want to take a trip , 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 eliminating debt is a priority then the sacrifice will be worth it.
After spending is under control , you need to start working on the debt . If you are only making minimum payments, find a way to increase the amount you pay . Financial experts say that if you make payments of 2% of your balance each month – many times the minimum payment is about 2% of your balance – it may take as long as 22 years to pay off a $1,000 debt!
If you double you monthly payment you could quickly cut your payoff by more than half.
Paying so much more on your debt might seem hard , but as you see your credit card balances go down , you’ll be pleased with your efforts.
If you can afford to do more, 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, while paying only minimum payments on the others.
* When you get extra money, say a unexpected payment , or a rebate, apply that toward the one credit card 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. Set up your account online so can quickly and easily make payments from your checking account.
* Look for ways to make additional money in order to to pay down debt. Have a garage sale or if you are really serious take a part time job delivering pizzas or as a waiter or waitress.
As each debt is paid off you will feel more in control of your finances and the payments that you no longer have can be applied to existing debt to reduce it even faster . This is known as the "debt snowball" method of debt repayment.
Reducing debt is more about forming good habits and continuing them over a long period of time. Start today to make smart financial habits and you will be surprised how quickly your debt will be in the past.
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