Fast Ways to Reduce Credit Card Debt

Before you can create a debt elimination plan, you've got to open your eyes and recognize the problem. Don't make excuses. Too much debt is too much debt, it's that simple. And if you can barely afford the minimum monthly payments, it's time to take action.

Kidding yourself doesn't make the problem disappear. Some consumers think of credit card debt as "just another monthly payment," kind of like a car payment or student loan.

Quite the contrary, credit cards have a major impact on credit scores, and these seemingly magic cards can disqualify you for a home loan or auto loan.

So, you've recognized the problem. What's the next step? Now is the time to make changes - not tomorrow, or next week, but today!

Gather the credit cards and destroy them. Don't cancel the account. Believe it or not, but this does more harm than good.

Grab a pair of scissors or plug in the shredder and get to work. It's okay to keep one credit card for a legitimate emergency. But, lock up the card or ask a trusted friend to keep it out of your reach.

Once the credit cards are destroyed or locked up, it's time to create a plan that'll help you get out of debt.

First, gather all your credit card and debt statements. These include credit card bills, installment loans and personal loans. Grab a calculator and tally your debts.

The total might shock you.

It's sad, but some people don't fully comprehend the seriousness of their situation until they add up their debts. But before you can eliminate the debt, you've got to know what you're dealing with.

Looking at the total, determine a time frame in which you're able to pay off debts. Take into consideration your amount of disposable cash each month.

Be realistic. If you owe $10,000, it may take a bit longer than six months to wipe the slate clean. Then again, I don't know your financial situation.

If you're living paycheck-to-paycheck, and you don't foresee a pay increase in the near future, you may have to look for ways to earn extra money.

You may be thinking: having to work two jobs sucks.

And I agree.

But, it doesn't have to suck, nor does it have to take time away from your family.

Do you have a computer? What about computer access? If so, you can make extra money from home and earn the cash needed to get out of debt.

Consider opportunities such as:

* Freelance writing
* Selling items on EBAY
* Marketing affiliate programs
* Web designing
* Tutoring

If you want to get out of debt fast, consider giving up a few luxuries. You know what I'm talking about: massage sessions, facials, $4 coffee, dining out, unnecessary shopping, etc.

Keep track of all your spending for an entire month, and I bet you'll be surprised at the amount of money you spend on "nothing." Rather than blow $300 a month on luxuries, put this money towards your debt.

Yeah, it sucks. But, it's a temporary sacrifice.

But don't let the cheapness stop with luxuries. Become a frugal person. Wait for sales or clearances, and don't skip comparison shopping.

It's kind of hard to get out of debt when your interest rates are 20 percent or higher. In this case, a large portion of your monthly payments go towards reducing the interest, in which the principle stays roughly the same or increases!

Get on the phone right now and call your creditors. If you've been a loyal, long-term customer, and you have a history of good payments, you should be able to negotiate an interest rate reduction. Even if the reduction is only temporary, this gives you enough time to reduce the balance.

If the creditor gives you a hard time, threaten to transfer the balance to another credit card. They want to keep your business. Thus, they're more likely to work out a deal.

It's no secret: if you want to get out debt, you've got to pay more than the minimum balance. If not, you'll be stuck with this debt for more than 20 years.

That's unacceptable!

Resolve to pay at least double the minimum payment. It's okay to start small. Once you've generated extra income, gradually increase the monthly payment amount.

Of course, for this method to work, you've got to stop using credit cards. Hopefully, you've applied the above steps, and you've gotten rid of the temptation.

Whenever I read financial reports or watch personal finance shows, I'm always amazed by the amount of debt some people have. I'm not talking about car loans, student loans, or mortgage debt. But rather credit card debt.

I know the economy has everyone in a frenzy, and many hardworking people don't earn enough to cover their basic expenses, which means they have to rely on credit cards for essentials such as health, fuel, and sometimes, groceries.

I don't like to judge others. But I do have a problem with people who view credit cards as an easy way to satisfy all their wants. You know the shopaholics who can't deny themselves, or the masses of people who try to keep up with their neighbors materially, even if it means hundreds of dollars in credit card payments each month.

But people want a solution. A way to sleep soundly at night. A way to stop harassing phone calls and let go of shame.

From what I hear, more and more people are turning to their homes and using their equity as a means to get out of debt. Of course, this only benefits homeowners with substantial equity, and those who aren't affected by declining home prices. But, there are varying opinions on the use of home equity loans and mortgage refinances.

Some experts feel they're a smart way to pay off debt. Homeowners receive a lump sum of cash, and instantly, their credit card debt is gone. And because a home equity loan or refinance features low rates and longer payoff terms, the monthly payments are affordable.

But sometimes, a home equity loan or refinance doesn't make sense. For example, if you can't afford your current living expenses, how do you intend to pay a home equity loan? Blind faith?

What's more, let's say you don't have much equity. Do you really want to risk losing your investment?

But let's take it a step further. Once you use the funds from a home equity loan to pay off debts, do you have the self-control (and desire) to alter your spending habits? If not, you'll be in a similar situation in less than two years.