Reducing Credit Card Debt

Reducing and eventually paying off credit card debt is a challenging goal, but as anyone who has gone through the process will tell you, the freedom and peace of mind that come with regaining financial control are completely worth it. In this article, we will cover a few of the most important steps that you should take if you are serious about reducing credit card debt, as well as a brief overview of how services such as those offered here at Madison Monroe and Associates can help you achieve your goals.

 

• Assess your situation. The first step you need to take is to find out exactly how much debt you have. A great deal of people who are in serious debt do not know their exact situation, oftentimes because by this point they are already dealing with several credit cards and perhaps several other forms of debt as well. As with many problems, however, the first step toward recovery is a bit of brutal honesty--so sit down with your computer and your bills and figure out how much you owe, and what the interest on each loan is.
• Negotiate a lower rate. Depending on factors such as your credit and the lending philosophy of your creditors, you may be able to negotiate a lower rate on your debt simply by calling your credit card company, explaining your situation, and asking for a reduced rate.
• Track costs. If you have found yourself in debt, it is almost certainly due to the fact that you are spending more than you are making. (Though sudden and unforeseen one time expenses such as medical bills do oftentimes play a role as well.) Take stock of your expenses and make an effort to reduce spending.
• Develop a strategy. The fastest path out of debt is to make the minimum payment on all credit cards except for the card with the highest debt, and to put the remainder of what you can pay into that card.
• Avoid using plastic. Store your credit cards away and don’t use them except in case of a sincere emergency!
• Track your progress and stay motivated! Don’t dwell on your debt, but seeing your progress every once in awhile can be a real confidence booster!
• Consider 3rd party help. A 3rd party debt reduction service such as Madison Monroe and Associates can help you by negotiating lower rates (oftentimes from a stronger position that an individual could) and consolidating your debt into a single, lower payment. We can also help you get on the path toward rebuilding your credit!