by Frances Stanford

Created on: April 28, 2010   Last Updated: May 31, 2010

The staggering amount of money owed on credit cards has caused, and continues to cause, a lot of financial hardship for families. It is important to get a handle on exactly how much you owe on your credit cards and take steps to reduce the debt. One of the main things that causes so much trouble with repaying the outstanding balances on credit cards is the high interest rates the companies charge in return for allowing you to use their money. This interest is added to the balance you already owe and in some cases the minimum payment doesn’t even cover the interest charged for the month.

When you decide that you really have to do something about your credit card debt, the first step is to total the amount owing on all cards. You should have your statements in front of you so that you have exact amounts. Make a record of the interest rate next to each amount that you enter as well as the minimum monthly payment. When you have this total amount with all the cards listed, there are several steps you can take to lower your credit card debt.

Apply for a no interest credit card. This type of card usually has no interest charged on the outstanding balance for an introductory period of time – usually six months. When you get approved for this card, transfer the balances of the cards with the highest interest rates. Make the minimum monthly payments you usually make on these cards when you pay on the new card balance. In this way the amount you pay comes directly off the balance without having any interest taken out of it. Contact your bank to apply for a debt consolidation loan. This will benefit you greatly if you already have a good credit rating. By combining the balances of your credit card into one loan, you have one monthly payment that will be significantly lower than what you are paying at present. If you wish you can continue to make higher payments each month and in this way you will lower the amount of money that you owe. If you don’t want to apply for another credit card or a loan, you can start paying off your credit cards on your own. Start with the card that has the lowest balance and make a higher payment each month. If possible make a regular payment, plus the amount of interest charged on the balance. If not, as little as an extra $50 a month will make an amazing difference. When you receive your statement, you will be able to see a sizeable reduction in the amount of money that you owe. You do have to keep making the regular payments on the other cards at the same time. Chances are you have had these credit cards for quite some time and have been making your regular payments. Contact the credit card companies and ask them to lower your interest rate. This will help in reducing your credit card debt because now more of the monthly payment will go towards paying down the balance.

While trying to lower your credit card debt, it is also important that you do not use them except for emergencies. Try to buy as much as you can with cash and in this way there won’t be any extra charges on your credit card in the month.

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