You might have taken on more than you could manage, in
terms of credit cards. However, that doesn't mean you have
to stay with these debts forever. With a little effort and
practice you can eliminate credit card debt permanently.
Here are some tips to help you sort out your debts.
1. Make a list
One of the first things you will need to do to ensure debt
reduction is to list out all your existing credit cards
descending order of interest rate. That means the card with
the highest interest rate must be listed topmost followed
by the other cards.
2. Assess the minimum payment percentage
Next you need to find out the minimum payment percentage
from the fine print on the credit card documents. Make sure
to add up all the minimum payments on each of the credit
cards. This is one of the first steps towards debt
consolidation efforts.
3. Check your affordability
Next you will need to ascertain how much you can shell out
each month. Make a list of your current expenses versus the
income you are receiving. If you want to eliminate credit
card debt on a permanent basis you will need to find out
ways to save up on money in order to pay for these
outstanding balances.
4. Payment methods
For all the other credit cards, excepting the one with the
highest interest rate you should make an effort to pay off
the minimum balances on each card. This is the only way you
can accomplish debt consolidation. On the card with the
highest interest rate, in addition to the minimum amount
pay off an additional amount to reduce debt.
5. Pay off the highest rate card
Even before you start paying off the outstanding towards
other cards make sure to pay off for the one with the
highest interest rate. This way you can avoid incurring too
many expenses towards this high rate of interest. This is
one way to go about debt reduction successfully.
6. Request for lower rate
The credit card market is so competitive that if you
request for a lower rate from your creditor you might just
get it! Lower rate means you can get rid of credit card
debt that much faster!
7. Do a balance transfer
You'll be surprised at how much savings a balance transfer
can actually make for you! Look for a card with a much
lower interest rate. Then transfer your outstanding
balances to this card. Now you just have a single payment
every month at lesser interest rates! That's a great way to
ensure debt reduction.
8. Make a promise
You need to promise yourself that you won't use the card
for anything else other than emergency situations. If you
stick to this resolution you will be sure to save a lot and
get rid of credit card debt much faster.
9. Use your savings
Make sure to use up the money in your savings account to
pay off the outstanding balances as much as you can. As far
as debt consolidation goes this is the fastest method.
10. Read the fine print
If you plan on going for a new card with a low interest
rate, read the fine print as most of them are promotional
offers. Know what the rate is after the promotional period.
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Article by Richard Greenwood, founder of finance and credit
card comparison website http://www.click4credit.com.au .
The site features expert articles on a wide range of
financial topics including debt reduction & credit card
consolidation.
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