Trying to get out of debt can be overwhelming. Here are five tips for reducing credit card debt:
1. GET ORGANIZED Gather all your credit card and bank statements. List your balances from the highest interest rate card to the lowest. Decide how much you want to put monthly toward each card.
2. MAKE A BUDGET A budget helps identify how much you can spend monthly to pay off debt. Once out of debt, a budget is a great tool for meeting goals without falling back on credit cards.
3. NEGOTIATE A LOWER INTEREST RATE Call the customer service center for each credit card and ask for a lower interest rate. Companies will often work with you to keep your business.
4. PAY OFF HIGHEST INTEREST CARDS FIRST Since debt grows exponentially, the idea is to hit the cards with the biggest balance first to decrease the overall amount of interest you will pay back.
5. PAY MORE THAN THE MINIMUM If you donï¿½t pay more than the minimum amount, the interest accumulating on the balance will make it harder to keep up with repayments. Eliminate late fees by paying on time and use that money toward the balance of the loan.
For more information on managing your finances, go to Kentucky Living 2011 Financial Planning Guide.