f those credit card balances just never seem to disappear or you’re drowning in debt, you need a realistic payoff plan to get your financial house back in order. According to CreditCards.com, the average credit card debt per household with credit card debt in 2012 was $15,956. That’s a significant debt load for the typical household and isn’t an easy load to manage when you have a large family or are trying to save up for important expenditures. However, there are some simple things you can do to start paying off that debt and improving your financial standing.
Here are six easy ways to tackle credit card debt now:
1. Write down exactly what you owe.
You’ll need a clear idea of how much debt you actually have and what you are paying in interest on each credit card. Sit down and list all of your credit card balances, the minimum payment or average payment you have been making, interest rate, and average interest you collect on each balance. This will give you a much better idea of which cards need to be paid down faster than others, and how much you are spending on interest.
2. Consider consolidating some cards.
If you are eligible for a zero-percent interest credit card or have an open line of credit on a very low-interest card, consider consolidating your cards to save on interest. Just make sure you understand what the balance transfer fees are, and if you are applying for an introductory or low-interest card offer, make sure you can afford to pay off the entire balance before the promotional period is over. Carrying a high balance forward on the new card after the promotional period is over could just bring you back to square one.
3. Reorganize your budget.
Take a closer look at your current budget and spending habits to eliminate all uses of a credit card. If you are paying for groceries and other basic living expenses with a credit card, you need to rework your budget so you are operating on a cash-only basis. Stop using your credit cards entirely and get into the habit of buying only what you can truly afford. You’ll find it much easier to tackle credit card debt when you use this approach.
4. Negotiate with creditors.
Call up your creditors to see if they can reduce interest rates on cards that you have been carrying for a long time. As long as you have been making regular payments and have a good account standing, you may be eligible for an interest rate reduction or modification in payment terms.
5. Make double minimum payments.
Instead of making a single minimum payment once per month, make a minimum payment every two weeks and pay down that balance faster. You’ll be accumulating far less interest as the balance goes down and will be a few steps closer to eliminating that balance altogether.
6. Pay down cards that have higher balances for a credit score boost.
If you want to boost your credit score as quickly as possible, you will want to open up as much available credit as possible – essentially lowering your credit utilization rate. Pay down the cards that have balances closer to the credit limit to improve your credit utilization rate and boost your credit score.