Paying Down Credit Card Debt – Part 1

Excessive credit card debt is one of the primary reasons that American families struggle with meeting their financial obligations each month. With interest rates over 25% on many cards, it’s understandable that meeting minimum payments alone can be a  challenge, not to mention paying more than the minimum each month. In this series of articles we’ll share a few techniques to try that can speed up the process of paying off your credit cards.

Pay down technique #1: Stop using your credit cards. In order to make any progress at all toward getting out of credit card debt, you have to stop adding to the balance. The easiest way to do so is to cut up the cards. Some folks have a hard time doing this because they rely on the cards for emergencies. If this is the case for you, then at least pull the card out of your wallet or purse and store it in a difficult to reach location in your home. The cupboard above the refrigerator is a good place.

Pay down technique #2: Find extra cash for debt. In order to make progress, you’ll need to identify ways of paying more than the minimums on credit cards each month. Instead of buying coffee out, make your own coffee at home and take it with you in a travel mug. This tip alone can save thousands of people $90 a month – and that’s if they only buy one drip coffee a day! Think of all the extras that you could do without – then use the money toward your debt instead. Any time you make a decision not spend money on unnecessary things, put that amount aside for the credit card. If you have to, physically put the cash aside. At the end of the month count the money that you’ve successfully saved. It’s amazing how much money you can find in your existing budget if you put your mind to it.

Pay down technique #4: Get a second job. If, even after eliminating unnecessary expenses, still find you’re unable to come up with enough to pay down your credit cards fast enough, it’s time to find more income. It can be worth it to take on a second job for a short period of time. Look for temporary positions or seasonal help positions. Another way to go is to brainstorm all of the types of work you can do and then check to see if private parties need that kind of work. Craigslist can be a great way to find casual jobs. If you’re great at landscaping, moving, cleaning or other domestic or labor intensive work you’ll likely find a ton of part-time or one-time jobs.

Pay down technique #5: Pay your credit cards on time. It’s essential to make timely payments. A missed or late payment can cause your interest rate to skyrocket and put a huge dent in your ability to pay down your credit card. Late fees can also quickly add up. A $35 late fee can be equal to or more than the interest on your balance in a given month.

In Part 2 of this series we’ll give you information about how to organize your credit card accounts to get the most bang for your buck when you go to use your extra money to pay down balances more quickly.

Tags: credit card debt, credit card tips, tips for paying down credit card debt