The best way to reduce credit card debt is the same way the old proverbs says you should eat an elephant: one bite at a time. The difference with credit card debt is that with each bite you take out of the amount owed, the amount of interest you owe decreases too. And when it comes to paying off credit card debt, it all comes down to the interest.
Interest is the amount you agree to pay your creditor for lending you money, or in this case, extending you a line of credit. In most cases, if you pay off the charged amount before you receive the monthly statement (there is a set time period with each account) you can avoid paying any interest. If you are in credit card debt, you were unable to do that.
If you only owe money on one card then focus on paying as much as you can on it each month. Do not just pay the minimum amount due. This can take years and adds an amazing amount of money in interest payments. Paying only the minimum amount due is what keeps most people in long term debt, and keeps the credit card companies rich.
Look for any extra money each month and put it toward your credit card payment. Roll change, get a part time job or return bottles and use the deposit money to do this. Consider any unexpected money that comes your way, like a bonus or a birthday check, just one more deposit towards this debt.
If you have multiple credit cards then you need to make a decision. You can try to pay off the card with the highest interest card first, because this will save you a lot of money in the long run. For some folks, however, paying off the smallest card amount first gives them such an emotional boost that it helps them to keep on track with their debt plan. You need to decide which method will work best for you.
Either way, it’s a good idea to set up your debt payments electronically. This way, you will not skip a due date, and you will have those timely payments credited to your improving credit score. Any extra payments for that “found” money can be made either electronically, or with a paper check.
Of course, there is no point in paying down credit if you are still putting purchases on the card. Commit to either working from cash or through a debit card that is directly tied to your bank account and does not allow you to overspend. When you are ready to start using credit cards again, you can look into secured cards to rebuild credit, cards that are especially designed for people with bad credit, or even reward cards when your improved credit score merits it. Tools like the credit card “Chaser” above can help you do this when the time is right.
Until that time, make paying down this debt your focus. Keep a chart, a spreadsheet, or a nagging spouse by your side to help you stay on track and keep you encouraged. You can reduce credit card debt with a plan and a goal.