by Catherine Woods

Created on: March 10, 2010   Last Updated: July 05, 2010

When used correctly, credit cards can be a useful financial tool, but the majority of credit card users simply do not use it responsibly. As a result, credit card debt is becoming a huge economic problem.  Millions of people are consistently spending more than they make and bridging the gap with credit cards. By using some of these smart techniques to lower your credit card debt, you can quickly find yourself in a better financial situation than many of your peers.

Budget

If you have been using your credit cards to make ends meet, then it is time to do a budget.  Find out what you are currently spending your money on and find ways to cut back.  If you are consistently using credit cards to fill in the financial gap, then you need to a complete overhaul on your spending.  The truth is, no matter how tight a budget is there are always places to reduce spending.  Find where those places are and start cutting your spending until it aligns with your income.  Only then will you be able to lower your credit card debt.

Lower Interest Rate

After you have made your budget, make a phone call to your creditors to ask them to lower your interest rate.  Your interest rate is what determines how much of your payment actually goes to pay off debt.  By lowering you interest rate you will be able to lower the amount of credit card debt you have faster.  So do not be shy, pick up the phone and get that lower rate.

If your credit card company simply will not budget on your current interest rate, find a company that will compete for your business. Many companies will offer a significantly lower interest rate if you will transfer your existing balances from a competing credit card company to a credit card with them. Take advantage of this competition and start lowering how much you pay in interest. Remember, the less interest you pay, the more money you will have to start lowering your credit card debt.

Stop Charging

You cannot get out of a hole if you continue to dig, so stop digging a bigger hole.  Put your credit cards in a block of ice or better yet, cut them up. By removing the temptation of having the credit card in your wallet, you will much less likely to charge up your card.  If you ever feel tempted to use your card again, look at your budget and the debt you currently have.  That may just be the reality check you need to put that credit card back on ice.

If you just cannot part with all of your credit cards,

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