Credit card debt is easy to accumulate but can be difficult to eliminate if you have poor spending habits. Many people are attracted by low introductory rates on credit cards and cash advance checks. If you have been overwhelmed by your credit card debts, you should see a credit counselor who can give you helpful advice on how to deal with your finances. Here are nine tips that could help you reduce your credit card debts.
Take stock of your situation
Make a list of all your credit cards and add up how much you owe in total. Put the smallest debt on the list first and the largest at the bottom. Write down the minimum payment due on all your credit cards. Pay off the smallest debt first, then use the money you’ve freed up to pay down the next lowest debt and so on. Make the minimum monthly payments on all your other credit cards.
Stop using your credit cards
Stop buying items you can’t pay for with cash. You’ll end up accumulating more debts that will take a long time to pay off. If it is possible, put your credit cards somewhere where you can’t see them and pay cash for all your purchases.
Get lower interest rates
The easiest way to save on your credit cards bills is by negotiating lower interest rates. Contact your creditors and explain your financial situation to them. They may agree to lower your interest rates. Be sure to pay the monthly minimum balance to prevent your debt from accumulating. If it is possible, pay more than the minimum balance as this reduces the amount of time required to pay the debts.
Track your spending
Make a list of all your expenses including your recurring bills and purchases. It helps to know what you buy frequently. Analyze the list and single out those items you do not need and buy only those you definitely need and not those you just want.
Increase your income
If you can only afford to make only the minimum payments on your cards, try to come up with a way to increase your income. Look for another job besides your day job or try blogging or freelancing. When you get a part time job or find a way to make money online, use the extra income to pay off your debts.
Create a Budget
Impulse buying is the leading cause of credit card debt. The best way to avoid this expensive habit is to create a budget and stick to it. Make a list of all your expenses and your net income, determine where you spend most of your money and cut back on unnecessary expenses. There are various online programs that make it easy to create a budget.
Sell stuff you don’t use
It really doesn’t make sense to hold on to something you don’t really need. For instance, if you bought a pair of expensive boots on credit, you could resell the boots on eBay and use that money to pay off some of your debt.
Shop for low interest credit cards
If you must use credit cards, shop for those that have low interest rates. There are many credit card companies all trying to outdo each other by offering low interest credit cards and other lucrative offers. However, be sue to bear in mind that using a credit card is never a good idea no matter how low the interest rate might be.
If you are already in debt, don’t panic. There are several ways of getting out of debt and one of the most viable of debt relief options is debt settlement or debt negotiation.