Debt reduction, a lofty goal, is also extremely difficult to carry out. As long as swiping your card feels easier than paying cash, you'll find yourself stuck in a downward spiral of credit card debt. Continued use combined with high interest charges means your credit card debt will just keep growing over time. A good offense is the best defense; stop the cycle now and take steps to free yourself of consumer credit card debt.
Here are some credit repair tips that can help you dig out from under a mound of debt:
- The first, most important step- reduce your spending. Before you embark on a plan to pay off your debt, you have to commit to not accumulating any more. Get rid of all but one credit card; keep this card for use in emergencies only. Make sure the card you keep has a low credit limit and a low interest rate.
- Transfer your existing balances onto a card that offers a limited-time 0% interest rate on balance transfers. During that period, maximize your payments; your money is going entirely to pay down the principle because there is no interest accumulating. You can transfer your balance more than once if necessary; jut watch the mail for offers from your credit card companies. If you don't have a card that offers a 0% rate, then transfer your balances onto the card with the lowest rate. Reducing your interest even slightly can have a dramatic effect on your balance; the more you owe, the more this transfer will save you money.
- Set up an automatic payment with your bank. Automatic payments ensure your payment is made in full and on time every month, which will help you with your credit repair. Some credit cards will agree to lower your interest rate if you are making automatic payments so talk to your customer service associate to see if you can negotiate.
- Consider a debt consolidation loan. By consolidating your debt, you can reduce your monthly payments and cut your interest payments. These loans usually charge with a much lower interest rate than do your credit cards so you will save money in the long term. Because you will only have one bill a month to pay, you are much less likely to send it in late or to forget to send it.