Hints to Reduce Credit Card Debt

Are you one of the millions of Americans with credit card debt?  Are you not able to pay off your card every month?  Are you barely able to keep up with your bills?  If you answered yes to any of these the following tips may be useful for you to help lower your overall credit card debt in 2014.

The first step in getting on top of your credit card debt is to know how much you owe.  Get a piece of paper or better yet a spreadsheet and list all your debts in one place.  If you want to know how much you owe, how much your interest payments will be and when you can get out of debt try my debt reduction spreadsheet.  You can get it at http://fiverr.com/kgmeyer/help-get-you-out-of-debt for a small $5 charge.

A good second step if you have a good history with a particular card is to call and ask for a lower interest rate.  You would be surprised to find out how many companies will lower your interest rate if you call or write and ask.  The credit card business is very competitive and companies want to keep good customers so they are willing to lower the interest rates for customers with good history paying.

Now if you purchase my spreadsheet you can list your debts from smallest to largest or by the highest interest rate that is charged.  I have done it both ways with my own debt and it is less than a $2,000 difference on my total debts including my mortgage and student loans.  My personal preference is to list the debts from smallest to largest paying off the smaller debts sooner and seeing debt disappear giving you extra incentive to pay off the next debt and so on.

If you are following the instructions on the spreadsheet you purchased from me you are making minimum payments on all your cards except the one that is being paid down currently and even then it may be the minimum.  But if you have a budget and are using my spreadsheet you may have extra money you can apply to your current debt you are working on to pay it down faster.  Once that debt is paid you will add what you were paying on that debt to the next debt on the list and pay that debt down faster.  While you are not making more than the minimum payment on all your debts you are on the one you are working on first and then it will follow you to the next debt reducing your debts faster than making small additional payments on all your debts.

If you are not paying as you go and getting rid of the balance at the end of every month stop using that card except in the case of an emergency.  In other words stop adding to your debts.  If you bank somewhere with bill pay charge something then pay it off immediately.  But beware some credit card companies do limit the number of payments you are able to make in a month.  Know your cards rules on payments but at least pay off what you charge on a monthly basis so you are not adding to your debts.

No matter what pay your minimum payment on time all the time.  If you are banking somewhere with bill payment or use a program like Quicken to keep track of your finances set up reminders so you will not miss a payment.  Late payments are costly due to fees and in many instances lead to an increase in your interest rate.  Also many companies will adjust your rate with them based on your history with other companies so being late on one card may lead to negative consequences on another.

Always be realistic on your time frame to pay off your debts and stay current with what is on your credit report.  Errors there can lead to higher interest rates on credit cards or prevent you from getting any new credit.  You are allowed one free report a year from each of the three big credit reporting agencies so ask for one from each every four months so you are monitoring your report year round.  Follow these simple steps and watch your debt reduce and in time you will be living debt free.

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