5 Best Strategies to Reduce Your Debt, Loans and Credit Cards

Personal debt and credit card debt is a big problem for many U.S. residents. Almost half of all American households spend more money than they make, resulting in significant debt problems, according to a 2001 Consumer Finances Survey conducted by the U.S. Federal Reserves (source). This consumer debt and credit card debt can cause you anxiety and stress and stop you from achieving your dreams, like going on a vacation or buying a home. Use these five debt-reduction strategies to help you manage your expenses, slash debt and conquer your loans.

Cut back on recreational spending. Going out for dinner or a movie can quickly rack up your monthly living costs. These types of unnecessary expenses should be the first type of spending you reduce. You don't have to stop going out altogether-treat yourself to a nice meal when you achieve certain milestones in your financial goals-but cut back as much as possible.

Reevaluate your needs. Assess your daily and monthly spending habits to determine necessary costs and items that you can reduce or eliminate. For example, you don't need high-speed Internet if you only use it to check occasional email; a dial-up connection is probably cheaper. Forego a gym membership if you mostly use the treadmills; instead, accomplish the same physical activity by jogging at a nearby park.

Stop using credit cards. Credit cards make it easy to spend money you don't have and go further into debt. Stop carrying your cards, and consider canceling your accounts.

Pay more. Pay more than the required monthly minimum on your credit card balances to help eliminate debt and pay down the interest you owe. If you own more than one credit card and can only afford a single payment, put you rmonthly payment toward the card that charges the most interest.

Make a phone call. Call your credit card company to ask for a reduced interest rate. It doesn't hurt to ask, and you may get significant savings that will reduce your debt faster.

Whatever strategy you choose to implement for reducing personal debt, know that there is no quick fix. It takes time and careful planning to vanquish your loan problems. Don't give up!