How to Cut Credit Card Bills in Half
Reducing your credit card debt is a highly beneficial step in controlling your finances. Considering interest rates and minimum payments, minimizing debt can be a daunting task. However, there are some simple steps you can take to reduce your credit card debt down to half. Some require strict discipline, while others are as simple as making a phone call.
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Instructions
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Compile your credit card debt. If necessary, gather your credit card statements for each credit card you have. Determine the interest rate, the current balance owed and any available credit that may be on each credit card. Many financial advisors, like Suze Orman and Robert Kiyosaki, suggest the first step in reducing credit card debt is to know where you stand.
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Contact each of your credit card companies and simply asked them to lower the interest rate. Because credit card providers are so competitive and interest rates can range from low to higher amounts, you have the freedom to contact your credit card companies to negotiate. If the first representative says they cannot lower your interest rate, inform them you can simply go to another credit card company that is offering you a better deal. If one representative does not comply with your offer, do not give up. You may have to call back periodically to get your way.
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Check each of your credit card statements to determine which one has the most available credit and the lowest interest rate. You can then use this credit card to pay off the balance of any other credit card that has a higher interest rate. This step will decrease monthly amount due on higher interest credit card, which will indeed save you money.
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Pay down your balance with any extra`income. Any forms of unexpected or bonus income can be used to pay down the balance. The lower the balance, the less interest is taken to pay off the loan. Selling items you no longer need on sites like eBay.com will also allow you to generate extra income to pay down your credit cards and cut the bill in half.
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Follow Dave Ramsey's Snowball Effect. In his book, "The Total Money Makeover," David Ramsey suggests arranging your credit cards from smallest amount owed to largest and begin paying the smaller debts first. Once a credit card is paid off, you take the same amount of money you paid on the lower credit card balance and apply the same amount to the next credit card with the lowest balance. This process creates a "snowball effect" that can ultimately slice your credit card bills in half as more money is dedicated on the debt. Combine this step with a reduction in your interest rate and you will save a lot of money.
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Track your progress. You can get a red marker and put a big X over the particular credit cards you paid off or reduced. Making charts to hang up to see your progress ensures you know that you are actually making progress and achieving success.
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Tips & Warnings
Ensure you are not creating more debt on the credit cards you are attempting to cut in half. Make sure you are up to date on your credit report as well. There could be errors on your credit report that can cause a higher interest on your credit cards than you deserve.
