While sometimes easy to accumulate, credit card debt can be difficult to reduce due to interest rates that are often in the high double-digits. Fortunately, by getting organized, following a budget, taking action to reduce to reduce interest rates, and establishing positive financial habits, it is possible to eliminate your credit card debt.
Gather your credit card bills.
- There are many free online tools and apps that can help you collect and organize your account information.
Review your credit card statements.
Make a list that identifies the details of your debt. For each account list:
- The name of the card.
- The balance on the card.
- The interest rate for the account.
- The monthly minimum payment amount.
- Any additional fees for late payment or account overages.
Create a monthly budget.
Once you are fully aware of your debt situation, get a clear picture of your finances by creating a budget. This will inform you exactly what your revenues and expenses are and will help you create more savings to reduce debt.
Reduce your expenses.
Try to figure out how to decrease your expenses each month so that you can use more funds to pay down your credit cards. Target primarily variable expenses listed in your budget to find ways to save money.
Pay off the card with the highest interest rate first.
Pay your cards off one at a time, starting with the account charging you the most interest. This will reduce your debt faster because you’ll be paying a lower interest rate on the remaining cards.
Pay the minimum balances on time.
Paying at least the minimum balance on each card every month, on time, is a requirement for maintaining a good credit rating and avoiding additional late fees that will add to your debt.
Think about consulting professionals for help.
If you feel overwhelmed, reputable debt counselors can help negotiate with credit card companies and help you to create a debt repayment plan that will work for your circumstances.
