3 Solid Ways To Reduce Credit Card Debt

Another month, another round of credit card bills. Some months they just seem to fly out of control. We had to replace a dishwasher that died. I had to go to the dentist to replace a filling. Life is expensive.

Since we put nearly everything on our credit cards, it all adds up. And those most-costly months impair our ability to save. It’s no fun if you’re a savings-oriented person like myself.

When times are good, of course, you want to spend more. I know I do. Sure, you go out to dinner more often or you open up your pocket for the latest charity pitch. It’s human nature.

Yet the ability to spend when money doesn’t feel so tight also drives up credit card bills. The U.S. economy’s relative robustness is one reason why credit card debt will hit $1 trillion for the first time in history.

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If you’re a financial services company issuing credit cards, let the good times roll! That means more money collected in interest when cardholders don’t pay their monthly bills.

According to Matt Schulz, Creditcards.com senior industry analyst, “2017 will be a record-setting year for credit card debt. Americans’ credit card debt will almost certainly reach its highest levels ever later this year and keep growing from there.

Add in a few expected rate increases from the Fed over the next two years, and that makes it even more important than usual to focus on paying down your credit card debt.”

Since there are thousands of credit cards out there, there are some easy ways to save money. Here are the three best ways:

— Pay Off Your Balance Every Month. This is a surefire way to avoid late fees and interest. Pay within the card’s grace period. That’s what my wife and I have done for years.

Of course, to work this strategy, you need to live within your monthly income. Your credit card bill shouldn’t exceed your ability to pay it off within a month.

Having said that, as I noted above, there are always months when you’re going to have some kind of emergency spending. That’s why having a short-term savings or money-market account for rainy day expenses is important.

— Go with a Balance-Transfer Card. The credit card world is exploding with balance-transfer offers. The deal is no or low interest if you transfer what you owe to another company.

The idea with a balance-transfer card is to pay less in monthly interest while you’re paying off your debt. You can find some current offers here.

As with all credit card offers, read the fine print carefully. How long does the low/no-interest period last? What does the rate reset to after the introductory period?

Remember that the name of the game is to pay down your principal and not have a balance from month that month. That’s the endgame.

— Plan Your Expenses. There are certain things you can’t plan for, they just happen, particularly if they involve your health or an emergency repair. But most purchases can be saved for in advance: Clothing, outings, vacations, appliances, etc.

Look down the road and see how you can save more major purchases. Then put the money aside in savings instead of putting it on your credit card. That’s one of the best ways to avoid debt.

“If you’re struggling with card debt, don’t bury your head in the sand,” Schulz states. “Take some sort of action, even if it’s small. Consider a balance transfer card, for example. We’re seeing zero-percent offers for up to 21 months, and that can have a huge impact on your ability to pay down that debt.”

source”times of india”