10 Tips to Lower Credit Card Debt

Credit card debt can be one of the most daunting financial hurdles to overcome. If you carry a balance on your credit card, or you have multiple balances spread out over several cards, it can be difficult – and sometimes impossible – to meet your minimum payments every month. Unfortunately, defaulting on your credit cards can have extremely serious and long-lasting negative implications for your credit score, which can make it more difficult to purchase a home, qualify for a loan, and in some cases even land a new job. Fortunately, there is hope, no matter how much you owe. If you’re ready to find out how you can lower your credit card debt, here are ten tips to help you get started:

  1. Ask for a lower interest rate. This is one of the most useful tactics for lowering your total debt amount. If you carry a balance on your credit card – meaning that you don’t pay off what you charge in full each month – then you are paying additional interest fees to your credit card provider. As your balance continues to growth, so does the amount of interest you pay. If you can negotiate a lower interest rate, your overall monthly payments will decrease considerably, and you’ll be able to pay off your principal balance at a much faster rate.

  2. Consolidate your credit card debts. Debt consolidation is another excellent strategy for individuals who have multiple cards. If you carry balances on more than two different cards – particularly if several of your cards have very high interest rates – you may want to transfer your balance to a new card with a low interest rate. Look for those that offer an introductory rate of 0% interest, but make sure to read the fine print so you won’t be surprised when the introductory period ends and your interest rate is raised.

  3. Always pay on time. Pay your credit cards several days in advance of their due dates rather than waiting until the last minute. In addition to assessing late fees, most credit card companies will immediately raise your interest rate if you default on a payment – even if you are only one or two days late.

  4. Pay more than the minimum whenever possible. It may be tempting to pay only the minimum amount due on your cards each month, but it’s also a surefire way to keep yourself in debt. If you only pay the minimum, you’re putting money towards interest, not your principal balance. Try to pay as much as possible, even if it’s only twenty or thirty dollars over the minimum – every little bit helps.

  5. Do not go over your credit limit. Not only will your credit score reflect this, but you may also incur fees and penalties from your credit card provider.

  6. Set a budget (and stick to it). In keeping with the idea that you should never go over your credit limit, why not set a budget for yourself and commit to making it work? Simply calculate your monthly expenses, including rent or mortgage, credit cards and other debts, food, gas, insurance, incidentals and so forth, and subtract that from the your monthly take-home pay. Is there a large discrepancy? Then you’re living beyond your means, and may need to find ways to cut back in order to make ends meet.

  7. Look for additional sources of income. If you’re already doing all you can to lower your interest rates and pay more than your monthly required minimum, try brainstorming inventive moneymaking ideas to supplement your income. This can range from taking on a second job to selling items on eBay to seeking out freelance work. Use your imagination and ingenuity.

  8. Get into the habit of carrying cash. In order to get yourself out of debt, you’re going to need to become less reliant on plastic – and a great way to do that is to begin carrying cash. How much can you afford to spend on luxuries like restaurants, clothing, movies and so forth? Give yourself a weekly allowance, put that much cash in your wallet, and promise yourself that once the cash is gone, your spending for the week has come to an end. You may also want to remove your credit cards from your wallet altogether in order to avoid temptation.

  9. Pay off the card with the highest interest rate first. If you have several credit cards, your priority should be paying off the high interest cards first, regardless of the size of the balance. This will save you serious cash in the long run.

  10. Consider asking for help. If you’re still struggling with your credit cards despite these tips, you may want to think about finding additional help. An experienced financial planner, a non-profit consumer support group or even an informative book like Robert Allen Debt Reversal can help put you on the right track.

Whatever you do, don’t make the mistake of attempting to ignore the problem – left unattended, credit card problems can only get worse. Instead, take control of your financial future today with these ten tips.