Credit Card Debt Management
Debt Reduction
To reduce your credit card debt, you must stop using your credit cards. These days, the average American with debt carries more than $8,000 in debt on credit cards. Perhaps you
pay some of your bills with your credit cards. You tell yourself it’s for the “rewards” like Disney Dollars and airline miles. But if using your credit cards for these purposes is adding to your credit card debt, you should pay another way.
In addition, many people fall into the trap of paying for things with their credit cards with the good intention of paying at least that amount 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 debt continues to increase as the interest continues to roll over. Never let this happen 2 months in a row. If you cannot pay off your credit card debt then you should not use your card for any other purchases until you can pay it off each month. Draw a line in the sand and start today- this very minute.
Debt Reduction
credit card debt means working toward reducing your credit card debt, of course, but you can’t do that without working toward reducing your expenses first. Saving money is like giving yourself a raise. See where you can spend less - be creative and look for ways to save each day.
Now, once you stop using your credit cards for bills and expenses, you also must stop using your credit cards for discretionary spending. That means if cash is short and you want to catch 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.
It’s tough love, to be sure, but nobody said reducing your credit card debt is easy.
Debt Reduction
Once you have dealt with your spending, you need to deal with the credit card debt. If you are only making minimum payments, that’s a habit that must end. Financial experts say that if you pay 2% of your 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!
That’s a scary thought, especially if your credit card debt is significant and you are adding to it each month.
If you double your minimum payment each month, you can cut down your overall repayment to 11 years instead of 22.
Paying so much more on your credit card debt might seem difficult, but when you see your credit card balances decrease, you’ll be pleased with your efforts and be well on your way to financial freedom.