How to Reduce Your Credit Card Debt

When you wake up one day and have more credit card debt than you ever imagined, it time to get serious about take some steps to reduce your credit card debts. If you're not sure how deep your credit card debt is, ask yourself these questions.

- Do you avoid opening your credit card statements?
- Do you have credit cards that are maxed out?
- Do you get late fees and over limit fees on your credit cards?
- Is your total credit card debt close to your yearly earnings or salary?

The first step is to reduce or eliminate (if possible) the use of the cards. This is difficult at first but studies have shown that using cash will help you spend less and second guess un-needed impulsive purchases. Track the credit card purchases you do make. This will keep the purchases in perspective and "real".

The second step is to try to reduce the rates on your existing credit cards before attempting to do a balance transfer. Often credit card companies will negotiate the interest rate on your current credit card if you express you are unhappy with your current rate or if they think they may lose you to another credit card company. Visit: http://www.lendingexchange.com for debt consolidation offers on credit cards, mortgage and insurances.

The next step is to transfer all your existing debts into a single low interest loan through which you pay back all your debts more aggressively. Since this loan is payable at single interest rate it's far better than multiple higher interest debts. This single loan could come in a variety of ways. If mortgage rates are low and you own a home, often the best way is through a cash out refinance. If you do not own a home the next best option is a balance transfer credit card that offers a 0% rate for an extended period of time. Usually this period is 12 months. In some cases it could be longer in other cases it could be shorter.

It's important to shop interest rates when searching for a balance transfer loan or credit card. Obtain a free online rate quote and always make sure you understand all the terms. Often there is an intro rate. It's very important to compare the APR (annual percentage rate) after the intro rate expires. In some cases in may be better to take a card with a 6 month 0% interest rate that has a very low fixed rate such as 7.99% after the intro period instead of a card that has a 12 month 0% rate with a standard rate of 19.99% for example.

Once you've selected the right balance transfer credit card offer the final step is to fill out the balance transfer application. In many cases it's a good idea to close down the credit card you have paid off. This will help prevent you from charging them right up again. Also closing out your cards completely may improve your credit profile.

For more information about getting help with reducing and or managing your debt contact the National Foundation for Consumer Credit www.nfcc.org or Consumer Credit Counseling Services at: www.cccs.org