How To Reduce Credit Card Debt

Credit card debt is one of the worst types of debt to carry. Such debt typically has interest rates that are usually at least triple and sometimes more than quadruple what you would pay for a car loan, mortgage or other bank loan. Compound interest at such a high rate means that credit cards are harder to pay off and the debt may even grow despite making payments on it.

In fact, for those who choose to use credit cards, the best plan of attack is to pay it off in total every single month without fail. Paying the extremely high interest rates that credit card companies charge is like throwing your money away. Therefore, you should attempt to reduce credit card debt first before you start paying down other debts.

Step 1

Pay more than the minimum payment each month. Credit card payments and interest are designed so that if you carry a balance and pay only the monthly minimum, you will never pay off the total amount on the card.

Step 2

Pay off the credit card with the lowest balance first. Start with your credit card that has the lowest balance in order to focus on paying it off completely as fast as possible. When it is paid off, close the account, cut it up or at least leave it at home when you go shopping.

Step 3

Pay off the credit card with the next highest balance. This next step is the real key to reducing credit card debt. The amount you normally would have paid toward that first credit card each month, and any extra money you can possibly find, must be applied to the next highest card. Do not give into temptation and reward yourself for paying off the first card by spending that amount each month.

Step 4

Keep applying this system. Keep using the money that would have gone towards other credit card payments to pay off the rest of your credit card debt until you are credit card debt free.

Step 5

Incur no new credit card debt. If you have finished paying off all your cards, work on creating a healthy savings account. Use your savings when you want to buy something that is not in your regular budget or for those surprises that life often hands us.

Step 6

Keep one credit card. Keeping one credit card open for things such as car rentals is a good idea as long as you continue to pay it off entirely at the end of each month.

You may be asking yourself where exactly this money is going to come from to reduce your credit card debt. The first thing you will need to do is carefully analyze your worth and build a strict budget based on your needs. Follow the budget carefully. You will be depriving yourself of things you want for a while; however, it will help you build the discipline you should have in order to be a good manager of your own finances. All bonuses, inheritances and extra money of any kind must be applied to debt reduction if that is indeed your financial goal.

By having a plan and working hard at it, becoming credit card debt free is an attainable goal. Get started now and see how different your life will be without the noose of credit card debt around your neck.

Jason Kay recommends you learn more practical debt reduction techniques at It's always a good idea to obtain a recent version of your credit score as well.

Share this article!

Follow us!

Find more helpful articles:



Good tips for reducing credit card debt. It sounds so easy now that I've read it.

By Tracey Parker