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How to Reduce Credit Card Debt

May 8, 2009

The Minimum payment trap

If you’re like the average person you probably have some debt, ignoring it and burying your head in the sand will get you nowhere and just put off the problem for a while longer. It will catch up with you eventually so you might as well deal with it now. Also, the longer you leave it the more money,time and stress it will cost you. Facing the problem is probably the hardest part of getting out of the financial hole you’ve got yourself into. Force yourself to face reality.

Even though your so far in debt and the lowest payment you need seems the only alternative for the financial mess your in, you need to figure out how you can pay more than the lowest payment and this is why! The credit companies make a lot of their money from this type of payment and would encourage anybody to take this approach with any outstanding balance. If you paid the lowest payment on $5000 it would take you 30 years to pay it off and you would become the ideal customer.

The 2% low payment is exactly what the credit card companies want. All that unpaid interest gets rolled over on top of your debt and you’ll be giving the credit company your hard earned money for years to come. You need to make the effort and pay more than this  amount every month, much more, otherwise you’ll never get out of the hole you’ve dug for yourself.

Here’s a method you can use with the minimum payment to help get rid of your debt. Get a list together of all your cards, with the highest interest rate cards at the top. Pay the lowest payment on all your cards apart from the one at the top of the list. Pay as much as you can on the card at the top of the list and keep doing this every month until the debt has gone,then cut the card up with a pair of scissors. Now use the same method on the next highest card in the list until eventually all the cards are cut up and your debt has gone. Making the lowest payment with a method like this is OK, but you should never make this type of payment on a credit card in the long term!

by Darrell Wiggett

Written by paydayla · Filed Under Debt Help 

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