Credit cards, or plastic money, are used the world over by people who just don’t wish to carry around bulky wallets, especially when on a shopping spree. These cards can be compared to small loans given by the bank, based upon your repaying capacity, which you can use in the event of any expenses. There are various repayment options available, and the sooner the money is repaid, the less interest is added to the total outstanding amount. While having a credit card is useful, there is a lot of responsibility attached to it, since mismanagement can result in a huge outstanding amount, which in turn, accumulates additional charges. Before you know it, you will be reeling under the burden of debt. If you are already in such a position, do not despair. You can take immediate steps to curb the vertical increase in your debt and work toward clearing out the whole outstanding amount. Read on to find out how to reduce your credit card debt and make your life much easier.
Getting Out Of Credit Card Debts
- Make a list of all your credit cards, with the amount of balance you have outstanding on each one of them. Start with the smallest balance in the list. Also, make a note of the minimum payment that is due on all the credit cards at that time. Credit card minimum payments go down as the balance goes down and this in turn, increases the payoff time.
- Pay the current minimum payment on your card or an amount more than that every month. Do not reduce your minimum payment even though the balance reduces. This is one of the easiest ways to reduce your credit card debt.
- The best way to reduce your credit card debt is to stop using it. Do not get accustomed to using plastic money. If you don’t have the money to make a purchase, doesn’t resort to credit. If you do, you will never be able to get rid of the debt that accumulates.
- Roll over the minimum payment from a credit card that has been paid off to the next credit card. This will keep your monthly credit cards payment the same and helps in restructuring your card payments.
- If you receive an unexpected income from anywhere, don’t look at it as a ticket to splurge. Rather, put the entire amount to pay off your smallest credit card balance.
- Keep a track of your payments. Put a chart up on your wall and update your progress on it each month. This practice will help in motivating you and keep you on track to reduce your credit card debts.
- You can consider the option of liquidating certain savings accounts to pay off your credit card debt. Do not liquidate your retirement funds, as the penalties are high. However, do not go for this option as the first choice, since you might end up with no funds for any emergencies. It should be your last resort!