Reducing Credit Card Debt - 5 Simple Methods to Get Out of Debt Fast

Many people are under the erroneous belief that the only way that they will ever get out of debt is by using an expensive debt consolidation company. Being in debt can lead you to make decisions that are simply not in your best interest. Even if you owe thousands of dollars to many different creditors, you can get out of debt all by yourself. All you really need is a well designed plan, a bit of determination and a lot of hard work. Here are 5 simple techniques you can use when reducing credit card debt.

Stop Using Credit
At the risk of stating the obvious, reducing credit card debt actually means that your outstanding balances go down each month. Credit cards are so easy to use, otfen requiring almost no thought at all. This is how you got into trouble in the first place. Unless you stop using them now, your hope of ever getting out of credit card debt decreases with every charge.

Many people recommend keeping a credit card for emergencies. This is simply a terrible idea. It is amazing how often things come up that appear to be emergencies, but are really just minor issues. Instead, save $1,000 as quickly as you can, and use this amount for emergencies. Spending cash is much more difficult to do. Handing over cash instead of plastic can truly have a positive impact on your spending habits.

Get Current on All of Your Bills
Credit card companies love it when you miss a payment once in a while. When you miss a payment, they are legally allowed to slap your account with a hefty fee, sometimes as much as $39. Additionally, once you miss a payment they can also raise your interest rate to a level that seems almost criminal.

Get current on all of you bills and stay that way. Incurring additional fees and penalties will not help you get out of debt.

Make Payments Twice a Month
Credit card companies charge interest based upon your daily outstanding balance. If you simply make the minimum payment each month, reducing credit card debt can seem like an uphill battle. These companies set your minimum payments at two to four percent of your outstanding balance. This is done by design.

What seems to be a good deal for the consumer is actually just a ploy to keep you sending in payments forever. If you are serious about getting out of debt, you should consider sending in more than the minimum payments required. One effective technique is to send in your credit card payment more than once a month. If your minimum payment is $20, try sending in $10 now and another $10 in two weeks. Not only does this reduce your daily outstandning balance, it helps to reduce the associated anxiety debt tends to cause.

You can turbo charge you debt reduction by adding a few dollars to your bi-weekly payments. Instead of going out for breakfast, take the $5 you would have spent and add it to your first payment. Do the same thing in two weeks and you will have effectively made twice the minimum payment required.

Snowball Your Debt
The Debt Snowball, made popular by Dave Ramsey, is a tremendous method to reducing credit card debt fast and efficiently. The basic premise is that once you are current on all of your bills, you start attacking the smallest debt with any extra money you can find. Once you have completely eliminated the smallest debt move on to the next smallest debt, and so on. Many experts tell you to pay down the debt with the highest interest rate first. While mathematically this does indeed work better, human nature has a tendency to work better the other way. Every time you pay off a debt completely your motivation level increases exponentially. This has a way of encouraging you to get out of debt even faster.

To learn more about the technique, visit Understanding Dave Ramsey.

Earn More Money
In our world of 50 hours workweeks with 40 hour pay, it is a difficult decision as to whether or not you should get a second job. Fortunately for us, there are literally thousands of things we can do now to earn additional income. Here are a few ideas to get you started:

• Sell Unneeded Items on eBay - You can buy anything on eBay, and thus, selling your unwanted and unneeded items becomes all that much easier. in the past I have sold hundreds of books, toys, clothes and even used shoes online. There was a time when I sold anything that was not tied down. Within a few weeks, you can realistically expect to earn hundreds of dollars in extra money. After you get comfortable with eBay, give Craigslist a chance. This site works work well for larger items that tend to be too expensive to ship via the post office.
• Get Another Job - Bagging groceries at the local store is not my idea of fun, but it can works wonders for your budget. Simply working an extra 10 hours a week at the current minimum wage ($7.25) will earn you an extra $290 a month. If you do get a second job make sure that you send any money that you make off to pay your credit cards. Otherwise, you are simply wasting your time.
• Learn How to Generate Passive Income - In this day and age, the internet is a valuable tool if used correctly. There are so many methods in which you can generate passive income. I would suggest picking out a program, such as One Week Marketing, that teaches you how to create additional income each month using FREE techniques.
  

Being in debt is not a fun place to be. You can, however, learn the art of reducing credit card debt without using expensive debt consolidation companies. The key is to change your spending habits, pay your bills on time each and every month, manage your outstanding debt and figure out a way to pay off more debt each month. Getting out of debt is not easy, but once you get there you will never want to charge anything ever again.