How To Reduce Credit Card Debt – Reducing Credit Card Debt Tips

Every month thousands of Aussies battle to pay their credit card debts. If you are like most Australians you may have multiple credit cards with high credit balances, each of which have to be paid monthly, then you may also see the effect these cards have on your available income. You can control your financial outcome. Credit cards can be a trap. There are a number of things you can do to begin to reduce your credit card debt now.

If you are serious about reducing credit card debt you need to cut up your card now. The problem many people have with credit card debt is that it accumulates very quickly. The mid set of “buy now and pay for it later” is all too common these days and it is easy to fall into this way of thinking if you are not disciplined.

Most people have a problem when the credit card debt has to be repaid. The first positive way forward to getting off the debt cycle is to cut up your credit card. Even if you only pay the minimum monthly payment you are moving in the right direction.
The next course of action is to look at a low interest balance transfer. If you can move your debt to a lower interest rate card you may save thousands of dollars.

Most credit card interest rates vary from around 8% per year up to 29% in some cases. However some credit card providers provide low rate balance transfers. If you have several cards at the higher interest rates it is advisable to move as much of that debt as possible to a lower interest card if you can. You can save hundreds or even thousands of dollars a year by doing this and also pay off your debt more quickly. For this to be effective, you need to cancel the higher interest card once you have shifted your debt elsewhere, otherwise you will just be further increasing the amount of debt you owe.

The next step is to pay your credit card debt off in order of priority target the highest interest rates quicker. Lets say you have several credit cards If you have three cards, all with the same balance but with varying interest rates, let’s say 8.95%, 15.95% and 27.95% if you pay them off at the same rate, the card with the higher interest rate of 27.95% will have more to owe than the other two cards. If you cannot consolidate the credit cards into one lower interest rate card, or loan, then it makes sense to pay more off the 27.95% credit card. This will reduce your overall interest payments dramatically. Once the higher rate card is paid out then you have smaller debts that are easier to manage.

Most homeowners can investigate refinancing options to pay off their credit card debts. The interest rates you end up paying is usually lower than those for of your credit cards. A personal loan may also be an option. You could consolidate all your credit card debts into one easy to manage payment with a lower interest rate than your credit cards. Remember to always cut your credit cards up they are a financial trap.
If you have tried all of the above and can’t make clear headway Insolvency Professionals can act on your behalf to negotiate and lower interest rate with your credit card company in most cases they will consider reducing the interest rates once they no a debt specialist is involved.

Comments are closed.

Insolvency Professional Partners: The Migration Place | The Law Place | Irish Bentley