Tips To Reduce Credit Card Debt
Having trouble with credit card debt? Not sure where to go from here? Here are some tips to help you get out of credit card debt and get back on the right track to financial success.
The majority of financial experts and advisors agree that the single most effective way to get out of credit card debt the fastest is to pay off the balance with the highest interest rate first. When you have paid that credit card off, start working on the credit card balance with the next highest rate, and so on, until you are credit card debt free.
An Example Of Reducing Credit Card Debt
Let's say you have three credit cards. Credit Card A has a balance of $5,000 and an annual interest percentage rate of 12 percent. Credit Card B has a balance of $2,500 with an APR of 18 percent and Credit Card C also has a balance of $2,500 but with an APR of 15 percent. Attack Credit Card B first because it has the highest interest rate-which means you could be paying more for it overall, even though your balance on Credit Card A is higher.
It may be tempting to try and attack the biggest balance, but financial experts agree that sticking with your highest interest rate credit card is the best way to get out of credit card debt faster.
Make More Than The Minimum Payment To Reduce Credit Card Debt
Another tip to get out of credit card debt is to make more than the minimum payment as much as possible. If you don't, it will take you forever to get out of credit card debt.
A good strategy for this while you're concentrating on making payments to your highest interest credit card, double or triple the minimum payments. Don't forget to keep making the minimum payments on your other credit cards, but focus on doubling or tripling the minimum payment on your high-interest credit card until it's paid off. Then, move on to your next highest credit card and double or triple the minimum payments on that one.
If the balance on your high-interest card is quite high and you don't seem to be making a lot of progress, consider shifting your focus to paying off a smaller bill first that you'll be able to eliminate quickly, and then go back to Plan A.
Make A Realistic Plan To Reduce Credit Card Debt
Another tip to getting out of credit card debt is to make a realistic plan and stick with it. Far too often, consumers make lofty goals and then realistically can't make them, so they give up. Another problem is when consumers make realistic goals and meet them until they see their bill get lower and their minimum payments get lower, and they get tempted to retreat back into paying the minimum only. However, this will only make it more difficult and it will take longer to pay off your credit card debt.
Another trap you will want to avoid is using your credit card while you're paying it off. If you're truly struggling with credit card debt, stop using your credit card for unnecessary expenses until you've paid it off.
Best Buy Credit Cards
Check out the table below for the current Best Buy Credit Cards, as researched by MoneyExtra
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