Top 5 Credit Card Debt Elimination Tips

If you’re overrun with credit card debt then you know more than anyone else how important it is that you escape from it. Fortunately, with a few smart financial moves and some discipline on your part, you can get out of debt and enjoy a little more freedom.

Here are the top five credit card debt elimination tips.

1. Get a Lower Rate

If you’re swamped in debt but you’re managing to pay it off, then your credit is probably pretty good. As a result, you might qualify for a lower interest rate on one or more of your credit cards.

You might be paying a rate right now that’s well into the teens, or higher. If so, then you stand to save a lot of money by getting that rate down to 6 percent or 8 percent. That’s especially true if you are also carrying a hefty balance on the card.

Try to negotiate with your credit card company or see if there are any promotional rates you can take advantage of to help lessen how much money you pay in interest each month. If you can save money by paying a lower interest rate, that’s additional cash that you can use to pay down your credit card balance more quickly.

2. Track Expenses

Start writing down your expenses. All of your expenses, including those mid-day coffee runs. You might surprise yourself at how much you’re spending on items that really aren’t necessary.

Once you overcome your initial shock, cut back on unnecessary expenses and use the money that you save to pay down your credit card debt.

3. Pay Off the Higher Interest Cards First

Even if you did manage to reduce your rate on one or more credit cards, there still might be some cards with higher interest than others. Pay off the card with the highest interest rate first so that you can reduce your overall interest expense.

Once you’ve paid off the card with the highest rate, move on to the card with the next highest rate, and so on.

4. Quit Using Credit Cards

One of the best ways to get out of credit card debt is to just stop using credit cards completely. It may seem like it’s easier said than done, but it’s part of the disciplined life that you’ll have to practice if you finally want to be free of credit card debt.

For starters, use a debit card instead of a credit card to buy items. A debit card will take money out of your checking account right away, so you won’t incur any extra debt.

Then, put your credit cards in a safe place. That way, when you’re out and about and tempted to buy something with plastic, you won’t have any plastic on you and you’ll be forced to take a pass on the purchase.

5. Make Extra Payments

If you received a birthday present or a Christmas present that’s cash, use that money to pay down your credit card debt. Just pretend you never received it and put it straight into debt reduction. You’ll not only lower the principal on your credit card balance, but you’ll also lower your interest expense because credit card companies usually charge interest on a daily basis.

Some credit cards, like airline credit cards, offer significant benefits to people who use them. However, most credit cards are incentives to poor financial management. Do you what you can to get out of credit card debt quickly and then consider putting the money you save into one or more personal savings plans.