Lowering Credit Card Debt: Taking the First Step

When you want to get control of your financial life, especially where credit card debt is concerned, the first thing to do is to stop using your credit cards! Many people just continue to use them, even though they complain about owing too much money on them and never being able to pay them off.

The worst things you can buy regularly on credit are consumable items like groceries and gasoline. Once they're gone you have nothing to show for the money, and these items require frequent replenishing. This is one of the fastest ways to increase your balance. Most people don't think about that, though, especially when they get points or airline miles on their credit card. They want to use it as much as possible because of the perks, but they don't realize that they're spending more in interest than they'll ever get back in benefits.

Using your credit card in the checkout line or at the gas pump is convenient, but paying the bill at the end of the month often isn't. A great alternative is to ask your bank if they offer a debit card - a card that ties directly to your checking account. It usually carries a name-brand credit card logo and can be used at any outlet that accepts credit cards, but it deducts the purchase amount immediately from your checking account. Your current checking account balance is your credit limit.

When you have to pay immediately for your purchases, you're more likely to be careful about how much you're spending. That's doubly true if you don't have a lot of money in your checking account, and it keeps you from buying things on impulse when you really can't afford them.

Keep in mind that the strategies discussed here work best if you stop using your credit cards. The focus is to reduce your credit card balance as quickly as possible without affecting other areas of your financial life. If you must use credit due to an absolute need, using the strategies will still help by slowing the growth of your balance, but you'll pay things off much faster if you avoid using credit cards at all. Putting your credit cards down and spending only what you can afford is a great first step toward getting out of debt.