3 Steps For Reducing Your Credit Card Debt

reduce credit card debt

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If you aren’t careful with how you manage your money, your credit card debt can get out of hand. Your debt can become so overwhelming that you know you need to reduce it but just don’t know what to do or where to start. If your credit card debt has you losing sleep at night you need to learn how to break out of your debt cycle.

Step #1 – Where Is Your Money Going?

You cannot curb your spending until you determine where you are spending. Makes sense, right?

Follow the instructions dieters are given, write it down. Folks who go on diets are instructed to write down everything they eat so that they can monitor their calorie count. You should follow the same exercise with your spending; write down every single thing you buy regardless of how much money you spend on an item. Be precise. Be diligent.

Step #2 – Review Your Spending Habits

It’s not a mystery, your credit card debt is a result of your spending habits. Do you buy what you “need” or what you “want”? There’s a big difference between needs and wants. If you review your spending habits and find yourself spending more on what you want vs need, change your method of payment. If you buy everything with a credit card you will most likely spend more on wants instead of needs. So stop paying with credit cards, buy only with debit cards or cash.

Step #3 – Reduce It By Paying It

The fastest way to reduce your credit card debt is to pay it off. But when you have several credit cards where do you start? Financial planners across the board strongly agree that you will save more money (on interest) by paying off the credit card that charges the highest interest first. Then start paying more than the minimum balance on your other credit cards.

Reducing credit card debt is a 3-step process. When you are buried in credit card debt it is easy to become frustrated and quit, but don’t. If you stay focused, have patience with the process and take it seriously you can whittle down your debt to a manageable amount and maybe even achieve zero balance status. Nothing is impossible if you work at it.