How to Reduce Your Credit Card Debt
Practical, simple ways to get your card debt down
Credit cards have quickly become an accepted fact of modern life. While many of our parents' or grandparents' generation wouldn't consider having a card, they are now extremely common due to their convenience and usefulness.
Although few would deny that credit can make day to day life easier, it can be easy to spend more than you can afford - paying by card doesn't always feel like spending real money.
Because of this, some people find that their card debts get steadily higher, almost unnoticed, until they become a real problem causing worry and anxiety.
If this has happened to you, then don't panic! There are several simple, practical steps you can take to get your debt back under control.
Don't Just Pay the Minimum
If at all possible, try to repay at least a little more than the minimum repayment every month. Minimum repayment amounts are at historically low levels - where once 5% of the balance was standard, many cards now only require a 2% repayment every month.
These low minimums mean that you can end up paying double or more the amount of interest that you'd pay if you increased your payments by only a little. And, obviously, if you pay a little more, then your balance will also be reduced more quickly.
Pay Off Your Most Expensive Cards First
Make your repayments count!
Most people who have a substantial amount of credit card debt hold more than one card. As each card will charge a different level of interest, it makes sense to concentrate on paying off the most expensive ones first.
While still making the minimum payments on all your cards to avoid penalties, concentrate on channeling any extra cash you have into paying off your most expensive in terms of the amount of interest you have to pay each month. This will be determined both by the APR of the card and the size of the balance - your monthly statement will tell you how much interest you're paying each month.
Doing this means that your repayments will have the maximum effect, reducing your interest payments most quickly and so lowering your overall debt levels sooner.
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