Five Ways to Reduce Your Credit Card Debt
We all know that it’s far easier to get into a credit card than it is to get out of it, but there are a few things you can do to help reduce your balance.
1. Have the Right Card
Step number one is to make sure you have the most appropriate credit card for your needs.
If your goal is to reduce your debt as quickly as possible, then you probably shouldn’t have a premium rewards card with high fees and interest.
Instead you need a basic card with competitive fees and the lowest interest rate you can find. By having a lower interest rate you can repay your credit card balance much sooner.
2. Consider a Balance Transfer
If you are going to switch credit cards, performing a balance transfer can help you towards your goal of reducing your debt.
A balance transfer is where your new bank will offer to takeover your old debt with a lower interest rate. Generally the lower interest rate only runs for a set period of time, but it’s still a great chance to reduce your debt more quickly.
Generally your minimum monthly repayment will be lower if you perform a balance transfer, so the trick is to keep your monthly payment at a higher level rather than dropping to the new minimum.
3. Decease Your Spending
If you keep spending money on your credit card you will make it a lot more difficult to reduce your card debt.
Many people rely on their credit cards to live from month to month and therefore need to use the card. This is fine, but at least make the effort to reduce any non-essential spending on your credit card.
If you are relying on your credit card to get by, then you should really consider putting together a budget.
Most people who get into credit card debt are simply spending more than they earn, and this is something that needs to be reversed as soon as possible if you want to reduce your debt.
4. Increase Your Repayments
There are plenty of things you can do to help reduce your credit card debt, but ultimately it all hinges on making repayments towards the card.
Even if you don’t spend a cent on your credit card, paying the minimum repayment each month will still only reduce your debt at a very slow rate thanks to the interest being charged to your card each month.
If you really want to reduce your debt, you need to start paying more than the minimum repayment. Ideally you should be paying as much as you can afford each month towards your credit card, as the more you pay the sooner you will be out of debt.
5. Cut Up Your Card!
Sometimes the only solution is to cut up your credit card so that it can no longer be used.
Cutting up your card doesn’t get rid of your debt of course, but it does ensure that you cannot spend any more money on the card.
If you rely on your credit card to feed your family this may not be a good idea, however if the main problem for you is impulse spending on non-essential items, then cutting up your card could be the way to go.
If you need more help managing your debt, contact DebtFix here, for a free consultation.