by Babs ‘O’ Reilly
Credit cards are the sources of debt for millions of people around the world. If you find yourself in this category, it is in your best interest to learn how to reduce your credit card debt and take advantage of money-saving tips. These tips can help you stay out of debt if you are not currently in debt, and you can save thousands of dollars in the long run
First, learn how to most quickly pay off your existing debt by paying the card with the highest interest rate first and working from there. You should be able to find a card with an interest rate of less than 12%. If you have good credit, anything higher than that is price gouging you.
Even if you pay off your debt every month before being charged any interest, you should ask for a lower rate in the case of an emergency and a month when you cannot pay off the entire debt.
Even if you do not have good credit, you should ask for a lower rate. The worse that your company can say is no, right?
Next, use your savings to pay off credit card debt. In most savings accounts, you are currently making very little interest. However, credit cards charge very high rates of interest.
Don’t completely clean yourself out-you should keep enough in your account to handle emergencies and to open lines of credit, but if your debt is growing try to pay it off quickly, even if you have to dip into these savings.
Always avoid charging things on your credit card when you can pay in cash. Although it may be handy to carry less cash, if you miss a payment, you can be charged very high interest rates.
Paying with a credit card also gives people spending willpower that they do not have normally. Because the cash is not physically leaving your hands, it is easy to ring up a large bill without realizing it. Don’t let your bill surprise you at the end of the month!
Lastly, consider a home equity loan to pay off your credit card debts. These loans often carry much less interest, often times only 6% as opposed to 12% or more. You can also use this as a tax deduction.
However, proceed with caution and only if you are set on getting out of debt. If you do not pay, your home will be taken away. This should be a last resort, but it is simply one of the many tips you can use to pay debt and stay out of it in the first place.
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