How to Reduce Credit Card Debt in 5 Steps

Posted by Amos Fred on January 30th, 2021

Sometimes, things might seem insurmountable. The task of clearing out your credit card debt might fall into that category. But you’re not alone. A ton of other people have a hard time clearing their credit card debt. If you’re looking for ways for credit card debt reduction, here are some suggestions to help you.

Be Organized About Your Debt

First off, determine how much you owe. Then think about how much your income is. How much can you spare and still be a bit comfortable financially? Having clear records of your expenses and monthly costs along with a list of the items you shopped will help you determine the best options for clearing your debt.

Negotiate the Interest Rate

Interest rates aren’t set in stone. You can negotiate for a lower one. Imagine the amount of cost-savings you’ll get if you achieve that. Call your creditors and ask them about it. Most people never try. You might get a good rate just by testing it out. Check the current interest rate on each of your credit cards you use. Make sure you know all the salient details about your cards. That is, how long you’ve been using each one, how long you’ve gone without missing a single due date, and how much your credit score has improved since your opened your account. Then check the current credit card rates. What is the national average rate for each of the credit cards you have? When you call the customer service department for each of your credit cards and ask if they could reduce the rate, knowing these details will help you negotiate effectively.

Prioritize Your Debts

Stop shopping. Stop being impulsive about your purchases. If you want to pay off what you owe first—and you should because no one likes to have debt hanging over their heads—you need to consider each purchase seriously. Thinking you’re not spending much anyway or that the item isn’t all that expensive or that it’s on sale isn’t going to help you. If you keep buying stuff you don’t need, you’ll never get out of debt. Focus on using every spare cash you have in paying off your credit card debt. That mindset will help you achieve your goal sooner rather than later.

Organize Your Debts

If you have multiple debts, then organize them from the one with the smallest APR to the highest. You’ll want to work on clearing off the one with the highest APR first. That’s practical and it cuts down on the amount of interest you pay. However, some prefer to work on clearing the debt with the smallest APR, mostly because it’s a motivational booster. When they see that they’ve cleared that, it encourages them to work harder on the rest. Depending on your personality and on how you motivate yourself, you’ll want to consider these options carefully before you proceed.

Ask Pros

There are plenty of ways to manage debt. You can consolidate it, have a debt management plan, or find debt relief programs. Learn more about your options for smarter decisions ahead.