Steps To Prevent And Eliminate Credit Card Debt
Prevention is better than cure
The first step to reduce credit card debt is to prevent it from taking dangerous proportions. The 2 most important ways of implementing this step are – balance transfers and use of cash.
Balance transfer is often treated as the number one measure to reduce credit card debt. This is really something that can help reduce credit card debt by slowing down the pace at which your credit card debt is getting built. It also provides you relief in terms of the APR being 0% for initial 6-9 months (and hence helps reduce credit card debt faster). To reduce credit card debt using this mechanism, you need to transfer your balance from your current credit card(s) onto another credit card that has a lower APR than your current card. Thus you reduce credit card debt by preventing it from increasing so rapidly.
The other preventive measure to reduce credit card debt is to use cash instead of card (as such, hard earned cash is difficult to get out of pocket as compared to just a credit card). So you reduce credit card debt by not adding more to it. That is the simplest way to reduce credit card debt.
However, you can reduce credit card debt only if you stick to your resolution to reduce credit card debt; otherwise it will fail miserably.
Looking for a solution to your Credit card debt problem?
First of all, you can take comfort in the fact that you are not the only one fighting the credit card debt problem. There are hordes of people who might have an even worse credit card debt problem compared to you; all of them seeking to eliminate the credit card debt problem. So what is the solution to credit card debt problem?
Well, the solution really is to smash the credit card debt problem with full force and eliminate it completely. Now how do you do that?
There are many ways in which you can tackle credit card debt problem. Different people suggest different ways of tackling credit card debt problem. However, here is a simple step by step account of what you can do to get rid of credit card debt problem.
- Take stock of the situation i.e. draw up a table with the following fields – Credit card name, balance, payment due day (the day of the month by which you are required to make payment of your credit card bill), APR, reward points earned, redemption offers applicable for your reward points balance, remarks.
- Fill the table up with data from your various credit cards.
- Figure out which credit card is contributing the most to the credit card debt problem i.e. highest APR and highest balance.
- Check if reward points can be used to make partial payments or cover any kind of fees or if the points can be bartered for something you need (spending less means preventing the credit card debt problem from getting worse).
- Draw a comparison table of offers available for eliminating credit card debt problem (i.e. consolidating credit card debt).
- First eliminate debt on the credit card that is contributing the most to the credit card debt problem.
- Practice controlled and healthy spending habits (after all you are looking to get rid of credit card debt problem and not aggravate the credit card debt problem).
- Look for alternative means of adding to your income (more money means earlier termination of credit card debt problem)
- See your debt reduce with time and celebrate the day when you finally put an end to your credit card debt problem.
- Debt consolidation: Debt consolidation or moving from high APR credit cards to a low APR one is generally the first step (the first reactive step) for credit card debt elimination. Here are a few things that you need to do:
- Do not go for the first balance offer you come across. Analyse various offers and choose the one that best suits you. This will be an important thing on you credit card debt elimination plan. Initial APR, Initial APR period and standard Apr, all need to be considered.
- Read the fine print on the balance transfer offer and check the terms and conditions on these. These might affect your overall credit card debt elimination plan.
- Compare other benefits e.g. rebates, reward points, etc, before you actually decide to go for one of the offers.
Remember this is just one of the ways of tackling credit card debt problem; you might devise your approach for doing away with credit card debt problem. Any and every approach is good if it fulfills the objective i.e. eliminates credit card debt problem.
