Reducing credit card debt is a step on the road to financial health. Some of the best tips to reducing credit card debt are actually quite simple, though not easy.
Stop using credit cards. Only use credit cards in dire emergency. If you cannot pay cash for a purchase, then you probably do not need it. If you are spending your future money for necessities, then you are probably living above of your means. Take a good look at your expenses and find places to spend less.
Pay before the grace period ends. If you need to use credit cards for purchases, such as to have insurance on large ticket items or for secure online buying, pay the purchase off before the grace period ends. Most credit cards have a grace period of 25 days before interest begins accruing.
Never use your future money for cash advances. Cash advances usually do not have any grace period. This means that the very next day interest begins building. Cash advances include using the checks banks and financial institutions send for their customers to use.
No annual fees. Never use a credit card with an annual fee. There are plenty of companies in the world willing to extend almost anyone credit without charging an annual fee.
Use your savings. Keep enough money in your savings account for emergencies. Any extra money would be better spent paying down your debt balance. The interest accruing on your debt is considerably higher than any interest you may be earning for your savings account.
Pay the highest interest. Pay the minimum on all of your outstanding debt except the card with the highest interest. On that card, pay as much as possible.
Consolidate. If at all possible, consolidate all of your debt onto one or two cards with a low interest rate. This will save you money and also make keeping track of your finances much easier.
Finally, reward yourself. Set goals, such as paying off a card or reaching a certain balance. When you reach that goal, treat yourself to a nice meal or gift. You shall from then on keep reminding yourself not to get yourself back into the deep hole you just climbed out of.
Stop using credit cards. Only use credit cards in dire emergency. If you cannot pay cash for a purchase, then you probably do not need it. If you are spending your future money for necessities, then you are probably living above of your means. Take a good look at your expenses and find places to spend less.
Pay before the grace period ends. If you need to use credit cards for purchases, such as to have insurance on large ticket items or for secure online buying, pay the purchase off before the grace period ends. Most credit cards have a grace period of 25 days before interest begins accruing.
Never use your future money for cash advances. Cash advances usually do not have any grace period. This means that the very next day interest begins building. Cash advances include using the checks banks and financial institutions send for their customers to use.
No annual fees. Never use a credit card with an annual fee. There are plenty of companies in the world willing to extend almost anyone credit without charging an annual fee.
Use your savings. Keep enough money in your savings account for emergencies. Any extra money would be better spent paying down your debt balance. The interest accruing on your debt is considerably higher than any interest you may be earning for your savings account.
Pay the highest interest. Pay the minimum on all of your outstanding debt except the card with the highest interest. On that card, pay as much as possible.
Consolidate. If at all possible, consolidate all of your debt onto one or two cards with a low interest rate. This will save you money and also make keeping track of your finances much easier.
Finally, reward yourself. Set goals, such as paying off a card or reaching a certain balance. When you reach that goal, treat yourself to a nice meal or gift. You shall from then on keep reminding yourself not to get yourself back into the deep hole you just climbed out of.