Reduce Credit Card Debt - 3 Ways to Lower Your Credit Card Debt

Credit card debt can build like a mountain on top of you and it's difficult to know if it will ever get better.  Learning how to reduce credit card debt is the first step to gaining financial freedom.  If you are only able to make your minimum payment every month, you won't get anywhere.  Making the minimum payment will not pay towards the principle, and it probably won't cover the interest.  Unless you reduce your debt, or make more money, you will never lower your credit card debt.

The first step to reducing your credit card debt is to stop making it.  You have to totally stop using your credit cards, or the mass of debt will keep increasing.  Keep the card that has the lowest APR with you in case of emergency and get rid of the other ones.  Freeze them, put them underneath your stove, or behind the exercise equipment you never use, anywhere that you won't be tempted to access them.  

Are your credit cards under the yoga mat?  Good, we can begin.

Read on for easy steps to take to reduce credit card debt.

I fell into this trap too easily!  Image courtesy of szlea via Flickr.
I fell into this trap too easily! Image courtesy of szlea via Flickr.

Organize Your Debt

Take all of your monthly statements and jot down what the APR is on all of them.  The highest APR credit cards are the ones that get the most attention.  If you have to make the minimum payment on the lower APR cards to focus your money on the high ones, do it.  If you don't get the high interest credit cards under control, the debt that you owe will skyrocket faster than you can check your mail.

Lowering credit card debt is about taking care of what debts are burning you the fastest.  It's an even mix of prevention and action.  Prevent debt from getting out of control, and take action to pay them down.

Negotiate Your Interest

If you have APR on credit cards higher than 12% (who doesn't?) you can call the credit card company or bank and talk to them about lowering your interest rate. This won't always work, and the success rate increases with the interest rate.

There are a few angles you can try to shmooze them over, and ask around with people you know for debt negotiation advice. Don't be scared to put on the "dog and pony show" here, it's your money and you have to be willing to take a risk to lower credit card debt. You can tell them that you received a better offer from another credit card company and are considering transferring your balance over there. They want to keep you as a customer, so many will be willing to negotiate to keep your business. Another option is to be totally honest with them. You can tell the credit card company that you're having a hard time making your payments and see if there are any offers that they can make for you. They prefer to get some payment from you, rather than you default, even if it means a lower APR.

Image courtesy of Ebu Cehil via Flickr.
Image courtesy of Ebu Cehil via Flickr.

DIY Debt Consolidation

Another option that's available to those who have a strong credit score is to take out a loan to repay all of their debt.  You can consolidate credit card bills on your own.  The loan will come from the bank and will cover all of the credit card debt that you owe. The interest rate on a bank loan will be much more favorable than credit card interest, so you stand to save thousands of dollars. Interest negotiation should be done before paying debts off to save a few more bucks.

The worst thing you can do to reduce credit card debt is nothing. If you keep on doing what you're doing right now you will be under a mountain of debt that will take decades to clear away. The best place to start is anywhere. Just get started!!


alberto98x 6 years ago

Thanks for sharing those valuable information

Lisa  6 years ago

Hey Empire This is Lisa Smith. I am really motivated by this post and especially those 3 points were amazing

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