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Reduce your credit card debts – Open the window to financial freedom*

Posted by on November 6, 2011

 

Dealing with credit card debts in your everyday life can be quite

cumbersome. Usually you fall into credit card debt trouble when you mount

up a high balance on multiple credit cards which you definitely will find

very difficult to pay off in future. Credit cards give you the opportunity

to live beyond your means. This is because with the help of credit cards

you can buy items by borrowing credit from the bank which has issued the

credit card to you. However, you have to pay back the bill at the end of

each month. If you fail to do so, then you will start mounting balances on

your credit cards by accruing interest. Now it will become more difficult

for you to pay back your credit card debts. This is because you have to pay

more than what you had borrowed. Thus *reducing credit card

debt<http://www.debtconsolidationcare.com/credit-card.html>

* will mean that you will be able to pay off your credit card debts faster.

Here are mentioned some ways in which you can reduce your credit card debts.

 

1.

 

*Do away with your plastics –* The foremost reason for getting into

multiple credit card debts is using so many credit cards. Hence the first

step you should take is doing away with your plastic credit cards. Keep

them out of your reach so that when you are out somewhere and have a

terrible urge to indulge in something, you won’t be able to as you know you

can’t afford it. This will prevent you from mounting up credit card

balances.

 

 

 

 

*Make a list of your expenditure –* There are a number of things that

you spend on, in a week or in a month. After you have done this, you will

find that most of the expenditure that you make is unnecessary. Hence you

should start making a list of items that you need to buy every week, that

is, your necessities and a different list for your luxuries. After you have

bought the items you need and kept aside money as savings if you have

anything left, you can buy any item of luxury.

 

 

 

 

*Pay off the debts with high interest rate first – *The more interest

you have on a particular debt, the more amount of money you have to pay on

it. Thus it would be much easier if you pay back your debts with higher

interest rate first. In this way you will be able to save money in the long

run as you don’t have to keep paying the higher interest debt.

 

 

 

 

*Consolidate your credit card debts –* One of the best ways of reducing

credit card debt is by consolidating your credit card debts. The easiest

way to do this is if you have property. You can take out a home equity loan

by keeping your house as collateral. This home equity loan is a second

mortgage loan which is a secured loan, which means it is secured against

some asset. As a result of this, the interest rates on these secured loans

are quite low. Thus you can take out a home equity loan, pay back your

credit card debts with this amount and then pay back the low interest

equity loan with time.

 

 

 

 

*Transfer your balances –* Another way to reduce your credit card debts

is transfer the balances from your high interest credit card debt to a low

interest card. In this way you will be able to pay back all your high

interest debts on a low interest. This will not only make your payback

process easier but help you out in the long run by saving money.

 

Following the above mentioned tips can help you in reducing credit card

debts.

 

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