The reduction of a credit card debt is generally the first step for a consumer to regain monetary freedom. Credit card firms manage to seduce consumers with low introductory interest rates and other gimmicks with the only purpose to increase the number of individuals that owe them money. This is something that most consumers barely or never think about prior to requesting a new credit card and using it irresponsibly. In most cases, the individuals who were initially offered low rates end up dealing with annual rates of thirty percent. Once a consumer reaches that stage, the best thing to do is search how to reduce the accumulated debt on their credit cards.
There are many ways to reduce the credit card debt but only five of them will be discussed in this article.
First, a debtor should list all their credit cards and begin to attack the one that has the lowest balance. The individual needs to ensure that the minimum payment on that card is made on time. Generally, both the balance and the minimum payments on credit cards move in the same direction. If for instance the minimum payments on a credit card decrease, so will the balance.
Second, the debtor may simply stop using their credit card if they don’t have cash to buy a product. This seems to be a harsh solution but diving deeper into the debt to purchase items while there is no money to pay back is definitely not a good idea.
Third, the individual should transfer any unexpected income towards the balance that they have on the credit cards. Doing this will inevitably speed up the payoff of the card and the consumer will be relieved from their financial burden much faster.
Fourth, the consumer needs to think about liquidating some of their savings account to reimburse the credit card debt. Indeed, the money on any savings account that earns low interest rates should be collected and sent towards the payment of the debt.
Fifth, the individual must make the minimum payment, if not more, on each one of the cards every month and keep track of the progress that they make as it will serve them as a motivation to pursue the efforts.