Lowering Credit Card Balances

Significantly lowering your credit card balance can be like coming from behind to win the Super Bowl.  If you are thousands of dollars in credit card debt you may look at the score board and think there is no way out.  But think about some of the greatest comeback football games you’ve seen and you’ll know there is always hope.

Play Good Defense

Football players know you can’t win if you are behind in the game until you stop the other team from scoring. The same idea applies with lowering your credit card balance.  You have to stop the damage by going on an all out blitz and refuse to use your credit cards unless it is an emergency.  Set a budget and use cash to pay for food, clothing, and miscellaneous items.  Not adding to your debt is the first step in reducing it.  In the words of Will Rogers: “When you find yourself in a hole, stop digging.”  

Play Good Offense

To win a football game your offense must score more than the other team’s offense, they must stay ahead to win in the end.  In terms of lowering your debt you want to stay ahead by controlling your impulse spending so you don’t have to constantly play catch up.  Watch for mindless spending on things like trendy clothes, weekly pedicures, going out to eat and electronic gadgets. Track your spending and be aware of where every penny goes.  You may be surprised at where that $50 went this week.  A good strategy is to play hurry up offense to gain as much yardage on reducing your debt in the shortest amount of time.  Use the money saved to pay down your credit card debt fast.



Forward Progress

To make really good progress in paying down your debt, contact your bank or card company and negotiate a reduced interest rate.   Reducing your interest rate from 20% to 18% can save you hundreds of dollars.  If the bank does not agree to this, you may look at transferring a credit card balance from a high interest card to a lower interest card.  There are still some 0% cards out there, but read the fine print for any hidden charges.

Reduce Penalties

Avoid these mistakes to stay on the field and continue to lower your credit card balance:

• Paying off low interest credit cards before high interest ones.  You’ll make better progress if you knock out the higher interest ones first.
• Skipping payments- this can ruin your credit history and start collection calls. Better to pay something than let the debt go unpaid.
• Getting back into debt once you are out-learn why you are in debt and don’t repeat the same mistakes.

Score!

Getting out of debt takes time. Set and budget, watch your impulsive spending and work with your bank to lower your interest payments.  Before you know it you will have scored the winning touchdown and be out of debt.

Comments