You really can reduce credit card debt fast, without using any expensive services. You have all the power, so it just doesn't make sense to pay a company to help you out, in most cases. Even if you're thousands of dollars in the hole, you can pull yourself out, all by yourself. The companies that you owe don't want you to do it, because they make less money. Here's how to reduce credit card debt.
More Than Minimum:
If you are only making the minimum payments, you will likely never reduce credit card debt, or at least not quickly. The companies have low minimum payments, which barely cover the interest rates. This is by design. It serves several purposes. It makes buying with these revolving accounts more attractive. It ensures payments for years, which increases the interest you pay. These two reasons alone make it hard to reduce credit card debt. By making payments above the minimum, you can make a real dent in the amount you owe. You'll find that you can quickly reduce credit card debt as you increase your payments each month.
This is a common way to reduce credit card debt. Essentially, you start with the account that has the lowest balance. You pay it off as fast as you can. Once paid off, you roll the money you were paying on that account to the next one, in addition to the payments you were already making on the second account. This continues until all accounts are paid off. This method has been around for many years, because it's an effective way to reduce credit card debt.
A consolidation loan will help you reduce credit card debt quicker. You basically take out a loan on the total amount you owe, so the reduction is not instant. Over time, however, you will find that you can reduce credit card debt more quickly. This is because you will make one payment each month, and the loan is for a limited term. In addition, the interest rate is typically lower. This is a great option, and it really does work.
Consolidation without a loan:
Those that cannot get a consolidation loan can still do something to consolidate on their own, so they can reduce credit card debt more quickly. This involves rolling up your accounts into the one or two with the lowest interest rates. You will find that the reduction in interest on your revolving accounts will allow you to pay them down much quicker.
Home Equity Loan:
This really is just another revolving account, but it's a little different. You will pay a lower rate of interest, at least in most cases, and there are some tax benefits. This can be an effective way to reduce credit card debt, but it should not be taken lightly. Additional loans, like a home equity loan, are an effective ways to reduce credit card debt, but they have some of the same problems. It's easy to charge on these, making it harder to eliminate the balances you owe. Use caution with any loan, so you don't end up in worse shape than before. Be sure to look at ways to get the lowest interest rates on loans.
I don't advocate getting new revolving accounts, but if you already have some with a zero percent interest, it may be a great way to reduce credit card debt. Transfer your balances to a zero percent account, even if it's just an introductory rate. You'll find that the interest rate makes up the majority of your monthly payment. You will quickly see a reduction in the total you owe, even if it's just for a short period of time. Keep an eye on what happens to the interest rate after the short introductory zero percent phase. If the rates skyrocket, transfer the balances once the introduction period is over. Don't go out and get new accounts, it's just an invitation for problems. Reduce credit card debt this way and you'll see how effective it really can be.
If you want to reduce credit card debt, you must stop adding more to it! Since these types of accounts are so appealing, it's easy to continue to charge on them. If you don't stop using the accounts, you'll never reduce credit card debt, or at least not for long. There may be a time or two when you must use the account for an emergency, and that may very well be okay. In case you're wondering, getting something you want isn't an emergency, repairing the car so you can get to work, might be an emergency. If you really want to reduce credit card debt, you should stop charging on your accounts for best results.
Make Money â€“ Pay Your Accounts:
You should explore some ways to make more money, so you can make bigger payments, and reduce credit card debt. There are literally hundreds of things you can do to earn money. When you use any of the methods, it's important to make sure the money you earn actually is used to reduce credit card debt. Here's how to make some money, so you can eliminate your accounts quickly.
1. Second job: Certainly not a favorite for anyone, but very effective. Working a single 8 hour shift per week, at $9 per hour, would net almost $300 per month. You can see how fast you can reduce credit card debt this way. You should also explore ways to make passive income online.
2. Yard sales: Have a good old fashioned yard sale, and you can make hundreds of dollars in a single day. You'll get a quick reduction on your accounts.
3. Sell unwanted items: Use eBay or other auction and sales sites to make money which can be used to reduce credit card debt.
When you use methods to make extra money, as means to reduce credit card debt, you must make a commitment to use the funds to pay down the bills. This way, you will quickly see the principal amounts drop. If you are seriously looking to reduce credit card debt, you will have plenty of options. Good luck, your efforts will make a difference.