How to Resolve Credit Card Debt

Despite your best efforts, it's not always easy to get rid of debt. High interest rates and little income can impact your ability to reduce your debts. What's more, continuing to use credit cards or repeatedly applying for new lines of credit can hinder any attempts to live debt-free. Fortunately, debt doesn't have to enslave you forever. There are practical and effective ways to resolve debt and alleviate financial stress.

Instructions

1

Increase monthly payments to reduce your debt faster. Minimum payments rarely put a dent in your overall credit card balance. Rather, they only pay off the monthly interest charges. If your credit card company asks for a $25 minimum each month, aim to pay $50 or $75 a month.

2

Get rid of credit cards to eliminate temptation. Do not contact credit card companies to cancel the credit card since this can reduce your length of credit history and bring down your credit score. Instead, take the credit cards out of your wallet and only leave the house with cash. If necessary, use scissors to cut the cards and throw them away.

3

Ask for a lower credit card rate. Paying zero percent interest or a low rate means a greater portion of your payments will go to reducing the principal balance. Call your credit card company if you're in good standing (good payment record) and request a rate reduction. If they grant your request, continue to make higher payments to resolve debt faster.

4

Borrow from cash sources. Taking money from retirement accounts, personal savings and home equity can quickly get rid of outstanding credit card balances. You'll have to repay money borrowed from retirement accounts and home equity, but these loans typically have low, affordable interest rates. This benefits individuals with high interest credit cards.

5

Re-evaluate your monthly spending. Excessive spending on unnecessary items can take a bite out of your disposable income and keep you in debt. Assess your monthly expenses to see where you're able to reduce spending. Eat out less, entertain less and shop less. Use this extra money to pay off credit card balances. An extra $200 a month will pay off a $2,000 credit card balance in about ten months.

6

Take a proactive approach. If you really don't have any extra money to pay off debt, think creatively and consider ways to bring in extra income. Turn your talents or skills into a money making business. Start tutoring neighborhood kids, teach music lessons, sell personal items, begin a lawn care service or get a part-time job.