How to Reduce Card Debt

Credit card debt is on the rise, and if you have it, you're not alone. When you apply effective strategies toward reducing credit card balances, you'll be closer to living debt-free. According to CNN Money, "Your total monthly long-term debt payments, including your mortgage and credit cards, should not exceed 36 percent of your gross monthly income." Setting and sticking to financial goals can reduce credit card debt quickly.

Instructions

1




Monitor your spending to get it under control.

Monitor your spending habits by recording each purchase you make. Record monthly expenses using a financial software program, a free budgeting worksheet from the Internet or a paper notebook. Many people spend money without thinking much about their purchases or how much they spend.

2

List the things you are willing to do without. Post the list as a constant reminder, and put it into practice. At the end of the next month, add up what you have saved. Pay those savings toward your credit card debt.

3




Negotiate a lower interest rate.

Negotiate a lower interest rate by reminding the credit card company of your good standing and on-time payments. Tell the company you do not want to leave, but have been offered a better deal elsewhere. Negotiate for the lowest fixed interest rate for all of your credit cards.

4




Pay more toward credit cards with higher interest rates.

Rank your credit cards by interest rate, and make the highest payment on the account with the highest rate. Keep paying the minimum monthly payment on the other cards. Once you pay off the highest-rate card, start working on the next-highest. Add the monthly amount you were paying on the first card to your payments on the next-highest card.

5




A financial adviser can provide sound guidance.

Double up on payments. According to television financial expert Clark Howard, "One proven way to pay more toward the most expensive card--and to get rid of it faster--is to make a separate payment every 14 days to the credit card company." Making an extra payment to your credit card each month will save on interest and help you pay off the balance sooner.

6

Seek help from a financial adviser or credit counseling service. According to the Federal Trade Commission, "Reputable credit counseling organizations can advise you on managing your money and debts, help you develop a budget, and offer free educational materials and workshops."