The average American family has between $6,000 and $8,000 in credit card debt. More than a few average Americans are drowning in that debt. So what can you do to help yourself pay off your credit card debt?
Keep reading for some tips that will help you.
- Take a good hard look at your bills. Lots of people in the U.S. these days are very good at pretending the situation with their credit cards is not that bad. They think because they can make their minimum payments that they are okay. This is simply not true. Look at your debt and be honest. Most likely, it is going to hurt to see what kind of trouble you are in, but the more honest you are, the faster you can start to fix it.
- Prioritize your credit card debt. Not all credit card debt is created equal. Decide which order you should pay off your credit cards. You are much better off paying down the highest interest credit card first, rather than making equal payment to each card. Make the minimum payment on all the cards and pay as much as you can towards the card with the most interest.
- Negotiate with your creditors. Many people don’t know that they can negotiate with their creditors. If you are in good standing, call your creditors and ask for a reduction in your interest rates. Most of the time, the credit card companies will do this. If your standing is not so good, call your creditors and work out new terms. Ask that late fees be waived and work with the credit card company to work out a payment schedule you can follow. Don’t be intimidated by your credit card company. They want their money and they will work with you to get it.
- Cut up your cards. Take all those cards in your wallet and cut them all up except for the one with the lowest rate. Keeping a credit card around for emergencies is a good idea, but you only need one. Cut up the rest. If you feel you might abuse the emergency card (suddenly you need to have that new CD or you will die), take a cue from a recent commercial. Take a bread pan, fill it half way with water and freeze it. Once it is frozen, place your card on the ice and fill the rest of the pan with water and put it in the freezer. Your card will take hours to thaw, and you will have time to decide if you really need that new pair of shoes. It may seem a little extreme, but this is your credit card debt we are talking about.
- Consolidate your debt. If you have something that you can use to consolidate your debt, do it. If you own a car that is paid off or a home that has some equity, use it as collateral against a loan from the bank. These loans normally have a lower interest rate and, if it is an equity loan, you can write the interest off on your taxes.
- Live within your means. Once you start paying off your credit cards, you need to take a long hard look at you spending habits. Where can you make cuts so that you are not reliant on credit cards? Do you really need that Double Latte each morning? Have you tried shopping discount grocery and clothing stores? Is the new car something you need or something you want for impressing the neighbors? Think long and hard about each of your purchases before you make them.
If you follow these steps, you will find that your credit card debt will get smaller. Keep in mind that it won’t happen overnight. It may take months or even years to correct your debt, but you will be glad you did.
For more information about paying of credit card debt, visit www.americasaves.org