How To Reduce Your Credit Card Debt

If you want to achieve financial freedom and never have to worry about money ever again, you have to reduce your credit card debt. If it’s constantly being racked up, what are your chances of living like a millionaire? None.

So, if you’re ready to reduce your credit card debt and eliminate them, here are the required steps you can take.

1. Make an excel spreadsheet detailing all of your credit cards. List down how much you owe on each card and list the minimum payments also. Then rearrange them so that the smallest balance is on top.

2. Leave your credit cards in your freezer. Well, it is only for the extreme credit card users who can’t seem to stop themselves from buying things. If you’re still able to control yourself, just keep them in a place where you can’t see them. Like they say “Out of sight, out of mind”. When you are not in reach of them ,it is much easier to reduce your credit card debt.

This also enforces a certain shopping discipline in you. When you can’t afford to pay for certain items with cash, you just simple can’t have it. This can drastically reduce your credit card debt if you have been a shopaholic for a long time.

3. Promise yourself to pay the minimum payment every month. When the amount you owe gets reduced, the minimum payment goes down as well. However, you can speed up the process of clearing up credit card debt if you maintain the amount you paid on the first month of the monthly minimum.

4. Whenever you receive additional income, use it in paying off your credit card debt. You will be thankful when your debt gets settled faster than before.

5. When one of your card gets paid off, maintain the same percentage of your income that is contributed towards paying off your debt. This will mean that the remaining cards will be paid with a higher amount, which means it will be paid off faster too. The process increases exponentially as your card gets paid off one by one.

6. Use the money in your savings account to pay off the debt. If your savings account is only earning you a measly 2% annually, it would be much more worth it to withdraw it and pay off the debt that will cost you 18% annually.

7. Congratulate yourself every month when you see progress. You should track every payment you made so that you are able to understand how much further you are from reaching your goals.

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