Tips on Credit Card Debt

     Unless you have loan sharks tracking you down, this is the worst kind of debt one can have, and the least obvious to get into. At some point in our lives we have all realized how quickly credit cards can add up.What we don't realize is the overall impact this debt can cause on our credit score even though payments are made on time. When credit score is being determined many factors come into play, one being your debt to income ratio. Large credit card debt could lower your rating, and increase interest rates for larger purchases, such as car or home, (making the ratio go even higher).
     There are actions you can take to eliminate paying these high interest rates on borrowed money.
Here are some suggestions that may be of some help:

• Budgeting Your Money -  Finding out where all the money is going is the first step to determine your situation. There are many tools to do this. It could be hand written or with the use of software available. I personally like Bankrate.com. because its free, and they do not ask for any detailed personal information.
• Reduce your Spending - Evaluate your spending. This could be as easy as not buying that $4.00 coffee a day on your ride to work. Note: (Review some of the previous posts for more ideas to cut your spend). Make a list of all current spending for areas you could save - Annualize the spend and total it up. You will be surprised at the findings. More drastic changes may be needed depending on your financial situation. For example, getting a part time job for awhile.
• Evaluate Credit Card Debt - Make a list of all your credit cards by interest rate and then balances. Make a determination of which cards should be paid off quickly ( Small balance, high rate, for example). Getting a good understanding  where you will save the most money or the most headaches is key.
• Leave the Cards at Home - This takes a certain amount of discipline. Get in the habit of using debit card instead. If you feel cutting up the cards is needed to stop the use, then go get the scissors. Remember cutting up does not mean closing the account. You may want to be careful of cancelling accounts and the effect it may have on your credit rating. I've heard of  putting them in a Tupperware bowl full of water and placing it in the back of the freezer. As crazy as it sounds, it works.
• Renegotiate your Interest Rate - Contact your credit card providers and speak to a supervisor. (Customer Service generally does not have authority to reduce your rate). Ask them to reduce your current interest rate. If you have been a member for awhile and make your payments on time, ask for a 0% interest rate for a year and negotiate from there. If interest rates are lowered make sure payments are made on time. Late payment could cancel agreement and raise rate back to where it was originally.
• Consolidation of Credit Card Debt - This will not only save you money but frustration of paying multiple bills on time. There are a few options which can be taken to consolidate this debt
• Transfer balances to a single low interest credit card. You can negociate this on an account you currently have, or get a 0% interest offer from new provider. Most of these offers are limited to a certain amount of time and only on balance transfers. This means you transfer balances, and cut up card. If it is used for any other reason you could pay regular interest rate for amount you charged until entire balance is paid, including what you tansferred.
• Get home equity loan or personal loan. If you have a good credit score, personal loans are usually lower than you can get from a credit card. A loan will also give you longer time to pay off, rather than the 0% introducory offers you can get with credit card providers. If you are able to get home equity loan for your debt consolidation you could also receive tax benefits for additonal savings. 
• Can't Meet Payments - If you find yourself in a situation where you can't meet the payments you may need to seek outside help. Don't procrastinate to long on this, as your credit score will suffer. There are many credit counselors or debt relief agencies out there. My advice would be to contact them as soon as possible to discuss a plan of action. No need to feel embarassed, it's what they do.
• Pay More Than the Minimum Payment - Providers want you to make the minimun payment. Why is obvious. The longer you pay the more they make. Making these kind of payments will take years to pay off, and by continuing to charge on them may never will. Lets say you are paying 10% interest rate on a $3,000 balance. Minimum payment lets say is $120 to start. It will take almost 8 years to pay off if you keep paying their minimum, and cost you $800 more. Find your debt calculation. Remember, this is if nothing else is charged.

• Let's Get Visual - Once you have a plan in place write it down and track your progess. I find this to be a good way to stay on track and give yourself a sense of acheivement.

Hope these suggestions will aid in your quest to free yourself of credit card debt.
Any other question you may have or suggestions you would like make feel free to leave your comment.