Credit cards are perhaps the leading reason why people get into debt. This is because one can acquire several credit cards with various credit limits at the same time. Banks don’t mind if you max out your limit and if you only pay the minimum amount each month since this is how they can make money. They would even like if you spend a long time settling your debt as long as you pay the minimum amount. This may be beneficial to banks but for you, this is a waste of money. Hence you need credit card debt reduction tips to pay off your debts the soonest possible time.
1. Stop using your credit cards for the mean time. You need to pay off your debts first so you won’t get caught in a new set of debts. This may be hard to do so what you can do is leave your credit cards whenever you go out to avoid unnecessary purchases.
2. Earn additional income. You may already have a steady job but remember aside from paying off your debts you also have needs that must be met. You can do part time jobs or you can look for items that you can sell. You need all the money you can get to pay off your debt fast.
3. Pay more than the minimum balance required. When you just pay the minimum amount, you are just paying the interest and the balance remains the same the following month. And no matter how long you pay the minimum, you debt still stays as is. The extra amount you will pay will go toward the balance itself so you can gradually lower it every month.
4. Cut off some of the cards. You can just keep on with the lowest interest rate and the lowest credit limit. With the low credit limit, you will not be tempted to splurge on things. Make sure you use it during emergency situations only.
If you diligently follow these tips you can prevent yourself from opting for debt settlement. The best way to pay off your debts without causing too much problem with your credit score is by paying off every cent you owed. Trying to settle and lower the amount may help but your credit score will also suffer in return. If you believe you can live with a bad credit rating then go ahead and do debt settlement.