Millions of people have been reported to get trapped under the credit card debt. This leads to a lot of inconvenience which is not at all expected by anyone. Hence, it is high time to put together some powerful card debt reduction techniques which must be considered duly.
Vital Steps to be Followed to Reduce Credit Card Debt
Some of the vital ones have been mentioned in detail as under:
- To avoid making bigger credit card debts – In case you are serious enough in getting rid of credit card debt, then it is high time to get the scissors out to move ahead for chopping. Do not make the mistake of including the store cards. Until the credit card debt gets reduced to zero, it is advisable to use cash for all transactions. Also, do not forget to set a monthly budget regarding personal expenses.
It is good to draw a certain amount of money at the starting of each month and keeping the same within that limit. In case you keep a credit card, then it is advisable to choose the one with the lowest credit limit. It must be used only on pre-planned occasions when the only method to payment includes the same. This will reduce the chances of growing of the debt of the credit card hence avoiding the danger of impulse buys.
- Never paying of the minimum – Most of the credit card companies require the person to repay a minimum amount of each month. It is normally 3% of the outstanding amount. But this is the biggest financial blunder committed by anyone. Banks and credit card lenders all over the world are successful in making billions of profits as people repay the debts which are minimum figure.
Suppose you owe an amount of $2000 on the credit card and have committed to pay the minimum monthly repayment then it may take you years to repay the debt. In the process, it may cost you more than $2500 which is more than the borrowed amount. Hence it is high time to make your aim to carry out the credit card debt reduction as quickly as possible. Hence, you must pay off as much as possible every month.
- Negotiating a lower rate of interest – In the meantime, steps must be taken to reduce the amount of interest paid by you. You must take the initiative to contact your credit card issuer and request for reduction of the rate of interest of your account. With the help of special offers, you may get the best options open in front of you. Always try hard to find something better than being offered.
- Finding credit card with lower rate – This is another important and viable option. You may browse the internet for finding of the credit card with low rate of interest and finally apply to transfer the existing balance of the credit card account to the new one. The less interest to be paid each month, the more cash you will be reducing for the overall debt. Also, you may be fortunate enough to fetch 0% rate of interest for first few months on the new card.
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