Credit Card Debt Reduction Assistance: Tips On Lowering Your Debt

Although credit cards can give you a lot of financial freedom and are great for emergencies, if not managed properly, they can also land you in a lot of credit card debt. The average American owes about $6,500 on their credit cards with many people owing well over $10,000. If you are under high credit card debt and are just managing to pay the minimum balance on your cards each month, with the new credit card laws that have increased the minimum payments considerably, you may just find yourself in immediate need of debt help. Below, we'll show you how.

Credit Card Minimum Monthly Payments Are Going Up!

The government’s Office of the Comptroller of the Currency (OCC) gave guidelines to all major credit card companies that they had to increase the minimum balance payable on their credit cards. Companies were given three years to increase their rates gradually. However, no one did anything for three years and now, with the deadline running out in mid 2006, most credit card companies have suddenly increased their rates for credit card minimum balance payments. So what does this mean for those who are under credit card debt?

It means that people need to be more aware about their credit card debt and try and get out of debt more seriously than ever before. With minimum payments increasing drastically, your credit card debt will continue to rise if not paid off as soon as possible.

Tips For Debt Management

To help you do just that, here are some credit card debt reduction tips:

• Cut up all your credit cards (barring one for emergencies) immediately. This way you will not use your credit cards and will thus not keep increasing your outstanding balances.
• Keep track of all your expenses on a weekly basis and try and cut down all those costs that are not absolutely essential.
• Budget some minimum amount each week that will go towards debt reduction. Once you budget this amount, make sure you send the check to your credit card company each week. Don’t wait till the end of the month. This way you can lower your interest payments significantly.
• Look around for offers where you can transfer your credit card balance to another loan with a lower interest rate. You may also be able to find zero interest balance transfer offers, where you won’t have to pay any interest for the first 8-12 months.
• Make your payments on time, even if it is only the minimum balance due. Late payments have a nasty way of increasing your interest payments and you will also have to bear increasingly high late payment fees. Even ONE late payment can cause your credit score to drop by 30-100 points!
• Keep credit card accounts you have paid off open, just do not use them (assuming the annual fees are not outrageous)! Your credit score reflects total available credit vs. outstanding balances. The more your available unused credit, the better.

If you are unable to handle your credit card debt management on your own, you should think about getting debt reduction assistance or some kind of debt help. A debt reduction counselor will be able to work with you and create a payment plan which will help you to get rid of your credit card debt in the least time possible. Just do your homework here – make sure you are not going with someone who will make your credit situation worse.

You can also use our free personal budgeting software to help set aside money to pay off your credit card debt. The sooner you are free of debt, the sooner you can regain control of your financial life.