Strategies to Reduce your Credit Card Debt with sensible Debt Solutions that Work to be Debt Free

Credit card debt has become a major problem ever since credit cards started to gain popularity. They are usually easy to get hold off and limited credit checks take place to ensure that customers are able to pay back the money they spend. Exciting offers such as free credit periods entice customers to spend more than they can afford and the option to pay back only the minimum rather than the full amount on the credit card statement make it easy to delay the need to address the growing debt accumulated.

Once you decided that you need to address your credit card debt, you might find it very challenging to say the least. But which credit card debt solutions work?

First of all you will need to stop using your credit cards. This might sound rather impossible, but the truth is that until you have your credit card balance under control and can stop paying off previous debt in addition to the high interest rates for these you will need to stop to add additional debt. Otherwise you will find yourself in a vicious cycle of paid off debt immediately being replaced by new debt. Therefore cutting down on your expenses – try to find out which expenses are avoidable in the short terms – will be an important first step to solve your credit card debt issues.

As a second step you will need to get an honest picture of how bad your debt really is. You need to create a list of all your credit cards, how much you owe on each of them, i.e. what your balance is, what interest rate you pay and how much you pay in interest each month.

If possible you might want to transfer your existing debt from high interest rate credit cards to credit cards with a low interest rate. This might even involve requesting a new credit card with a 0% balance transfer interest rate and you should discuss this option with your bank or even a local debt advisor. This means that you will have several months in which you don’t need to pay any interest on your debt on this new credit card – by transferring the debt from another credit card to this new one you can achieve substantial short-term savings in interest payable which enables you to pay off more of the original debt. You have to check carefully though what the interest rate after this initial period will be. If it is very high and you are unlikely to have paid off all your debt by then, you might need to plan another balance transfer after this period to a lower interest rate credit card.

Next, rather than tackling those credit cards with the lowest or highest outstanding balance first, you will need to start paying off any outstanding balances on your credit cards charging the highest interest rate. The quicker you pay these off, the quicker will your interest charges decrease. And the less interest you have to pay every month, the quicker you can start to repay the original debt, in turn reducing again your payable interest going forward!

Once the most expensive credit card is paid off you should cancel this one and move on to the next credit card. The ultimate aim is to only retain one credit card with the lowest permanent interest rate as this reduces the risk of you overspending as there will be a credit limit aligned to your pay-back ability.

Depending on your level of debt this process will take some time and you will need to be consistent in using any money you possibly can save to pay off some more of the debt. Writing down how much interest you pay every month at the beginning of this process and how much you have to pay after reducing some of your debt will show you how much money you previously wasted and will give you the confidence and strength to continue with the hard work and eventually become debt free.