Many of us have had the experience of using credit cards when we should not or putting one more thing on the card and hoping we will be able to pay it off at the end of the month, but then…something else comes up. Credit card balances can grow quickly and maybe we only think about them when it is time to make that monthly credit card payment. Credit card debt can feel overwhelming, but with the right strategies, you can take control of your finances and work toward financial freedom. If you are struggling with high-interest rates, or juggling multiple credit card accounts, these five secrets may help you reduce your credit card debt and regain peace of mind.
How To Reduce Credit Card Debt:
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Create a Budget & Track Your Expenses
The first step to reducing credit card debt is understanding where your money is going. Track your income and expenses to identify areas where you can cut back. Even minor changes—like cooking at home instead of dining out—can free up extra money to put toward paying off your credit card bills. A great way to do this is by using a budgeting tool to track your monthly income and expenses to see where your money is going.
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Pay More Than the Minimum Payment
Making only the minimum payment on your credit card bills extends your repayment timeline and increases the amount of interest you will pay overall. If possible, pay more than the minimum each month. Even an extra $20 or $50 can make a significant difference in how quickly you reduce your credit card debt.
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Focus on High-Interest Credit Cards First
One of the best strategies for managing credit card debt is the “avalanche method” which means paying off the credit card with the highest interest rate first while making minimum payments on the rest. This helps you save money on interest and get out of debt faster.
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Avoid Taking on New Debt
It may seem obvious, but one of the best ways to reduce credit card debt is to avoid accumulating more. Try not to use credit cards for non-essential purchases while you are paying off your existing balance. Even if you have another card that still has not reached the credit limit consider using cash or a debit card instead or really looking at what you are purchasing and deciding whether it is a need or a want.
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Consider Professional Help with Credit Card Debt
An experienced debt counselor can guide you through the process and assess your financial situation to come up with an appropriate plan to help you manage your debt. ACCC is a non-profit organization that can help you lower your monthly payments and save you thousands of dollars in interest charges. Your debt will be consolidated into one monthly payment and ACCC will manage the payment process to creditors ensuring on time payments. Entering a DMP can bring your accounts current which will help your credit score in the long run.
Can Non-Profit Credit Counseling help reduce credit card debt?
If you are feeling overwhelmed and unsure where to start, seeking professional help for credit card debt may be a great solution for you. Life events can occur unexpectedly such as a job loss or reduced hours, a medical issue or other unforeseen circumstances can put you in a position where you begin to accumulate debt that becomes unmanageable. In fact, as of the third quarter of 2024, U.S. consumers held a total of $1.17 trillion in credit card debt, marking an increase of $24 billion from the previous quarter. (NewYorkFed.Org, 2024). On average, households with revolving credit card debt owe approximately $10, 563.00 according to Nerdwallet.com. So, if you are considering credit counseling services you are not alone!
Nonprofit credit counseling agencies, like American Consumer Credit Counseling (ACCC), offer free financial counseling and debt management programs to help you get back on track. Reducing credit card debt takes some discipline, but with the right strategies, you can regain control of your finances.
If you need expert guidance, ACCC is here to help! Contact us today for personalized assistance in managing your credit card bills and creating a plan for a debt-free future.
Sources:
Nerdwallet.com
NewYorkFed.org
If you’re struggling to pay off debt, ACCC can help. Schedule a free credit counseling session with us today.
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