Baby Steps to Credit Card Debt Reduction

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We’ve all been told we need to live within our means. However, in today’s society, it’s all about instant gratification. Unfortunately, this can lead to massive debt and overwhelm.

It seems that most people, no matter what their income level, spend more than they make. If you find yourself in this situation, here are some suggestions to pay down your debt and regain your peace of mind.

What You Owe

First, you’ll need to figure out exactly how much you owe and to whom. I would start with the highest interest credit card. You will need to make more than the minimum payment. Cut back on monthly expenses so you will have more money available to use for debt reduction. By making smart choices like making your morning coffee at home, making a healthy lunch to bring to the office, and getting books and dvd’s from the library, you will free up more money to pay down your credit cards. These small sacrifices will help you save hundreds of dollars in interest.

Balance Tranfers

You can also transfer your higher interest cards to a balance-transfer card with a 0% APR. You won’t incur charges during the promo period. This is a powerful strategy to pay off your debt faster, instead of paying more interest charges. Be careful to make sure the rate on the new card won’t be higher than your current rate after the promo period.

Once that card in paid off, you can use the extra cash to increase your payments on the next highest interest credit card. This type of repayment is called “snowballing.” As your debts decrease, you will have more money to pay off your other cards even faster. 

Keep the end goal in mind. Be diligent in cutting your spending and delay major purchases. A great tool to track your income and expenses is a budget. Most of all, you will need to keep a positive attitude and give yourself SMALL rewards along the way!