How To Lower Credit Card Debt

Cutting back on spending and saving more are financial goals that many people do. That's great, but paying off debt is the key to real financial success. And what if you already have a lot of credit card debt, and you want to reduce the debt or even want to pay it off? The question is how to lower credit card debt.

The ease of use of credit cards is indeed the first choice to deal with financial difficulties. Credit cards are not a medium for debt but a means of payment.

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Errors in understanding the function of credit cards make their owners become entangled in bloated bills. Let alone pay off directly, even paying the minimum payment cannot be because the amount is the same as the salary per month. If not handled properly, not only credit card bills will swell but daily needs will be difficult to meet.

How To Reduce Credit Card Debt Without Ruining Credit

Credit cards are by far the most popular type of debt, followed by car loans, mortgages, student loans, and medical debt.

"Debt is a major barrier to achieving financial goals from home buying to retirement," said Carrie Schwab-Pomerantz, chair of the board of directors and president of the Charles Schwab Foundation.

According to Schwab-Pomerantz, debt affects people of all ages and backgrounds and even at different life stages. "Borrowing is very easy, paying it back is difficult," he added.

There are several ways to reduce credit card debt, including:

1. Create a payment plan

Start by figuring out what your debts are, then decide whether to use the "debt avalanche" or "debt snowball" method to reduce those revolving loans.

The avalanche method lists debt from highest to lowest based on interest rates. That way you can pay off the most debt by paying interest first.

The snowball method prioritizes the smallest debt first, regardless of the interest rate. The idea is that you will gain momentum as the debt is paid off and that will motivate you to keep paying it until it is paid off.

"Having a plan for how you're going to pay off debt can keep you focused on what it takes to achieve 'financial freedom,'" Schwab-Pomerantz says.

2. Switch credit cards

Experts often recommend moving balances from credit cards with high-interest rates, to cards with interest-free or low-interest balance transfer offers to reduce the amount of interest debt you pay.

"Now is a good time to focus on paying off debt because many credit card companies offer a 0% new year APR for balance transfers," said Paul Miller, a CPA and managing partner of Miller & Company LLP in Whitestone, New York.

Most offers allow you to pay 0% interest for a year or more. However, if you don't pay off the balance in full, the remaining amount will apply to the new annual percentage rate. In addition, most cards also have a one-time balance transfer fee, which is usually around 3% of the tab, and this is something to be aware of.

3. Ask the credit card issuer for a lower rate

At any time, cardholders saddled with high-interest debt can also contact their issuer directly to request a rate cut.

"Consumers have more power than they realize," says Sara Rathner, credit card expert at NerdWallet.

In the past one-year period, more than three-quarters of cardholders who requested lower rates did so, and most got a reduction of between 5% and 6%, according to research from

4. Freeze credit cards

Put your credit card in a drawer, or hide it if necessary. Then switch to a debit card and promise to spend only the cash you have, at least temporarily.

"Do whatever you need to so that while you focus on paying down your debt, you do everything you can to avoid adding to that balance," says Hanna Horvath, deputy managing editor at Policygenius.

Those are some ways to "how lower credit card debt". Hope the information is useful.


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