Probably the best credit card debt advice is to use a strategy when repaying debts. Using the best debt reduction strategy can mean hundreds, possibly thousands, of dollars in your favor.
Make a list of all your debts, along with the balance and interest rate of each. You might need to hunt for this information, but it’s worth the effort.
Include credit cards along with each rate and balance for purchases and cash advances, store/gas cards, unsecured loans, mortgages, and any money you’ve borrowed from friends or family. Debt free programs show that every dollar of debt matters when you’re working on getting the number to zero.
Some types of debt are not as “bad” as others. Good debts have fixed time terms and have been applied to something, hopefully an appreciating asset, that you couldn’t afford to buy from your own savings.
Bad debts are generally used to provide cash you don’t have to pay for non-appreciating goods. A mortgage, for example, is an investment in a property that you pay over a long period of time, so the risk of paying high interest or never paying it off is low. Credit cards, on the other hand, have both disadvantages. So, good debts are things like mortgages, student loans, and car loans, while bad debts are credit cards or similar credit lines.
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With this in mind, go through the list you made and mark each debt either ‘good’ or ‘bad.’
Cross good debts off the list (don’t worry about paying them off faster until bad debts are taken care of). Sort the bad debts by interest rate with the highest number at the top. Now, see if you can transfer balances from the high-interest cards to the lower-interest ones.
With this task complete, focus on repaying the debts at the top of your list. Pay the minimum required on the remaining debts.
If you have non-essential expenses, cancel them for the time being and divert that money to payments. And stop putting money into savings, but just for a while, and use those funds to defray your debts.
Give up expensive habits. You have to focus strongly on the high-interest debt at the
Top of your list, and stick to your determination to defeat it.
Just make some small sacrifices for a while so that your life can be better in the long term.
If you are absolutely overwhelmed with credit card debt, then you need to check out your debt relief options.