Reducing Credit Card Debt

Reducing credit card debts is on the priority list for many people. But an even higher priority may be researching techniques on how to reduce the debt already incurred. Too many people fall prey to the power of plastic, especially when it beacons for that "must have" special purchase. If the temptation to have now and pay later has hit a grand slam into one's finances, then now is the time to act.

A planned commitment is essential when reducing credit card debt. The commitment financial freedom begins with the cutting up and hiding of unnecessary credit cards. Digging out of the hole involves more than paying off existing debt, but also involves staying true to the "debt stops here" mantra. People wanting financial freedom must learn to resist the urge to keep spending money they do not have. In other words, impulse purchases must stop. Remember that the Bible says, "Godliness with contentment is great gain" (1 Timothy 6:6). A time may come when planning your purchases is not as pertinent, as it is while whittling away now. However, while in the process of trying to reduce the amount owed, try to examine purchasing habits. The path to financial freedom may seem painful, but it does help instill healthy, lifelong spending habits.

In the midst of reducing credit card debts, some people find it helpful to clean the card credit card closet out completely. Sources state you don't want prematurely close accounts. However, paying them off is essential. Apparently, lending companies take notice when spending is low and are prone to offer better deals during a purchase drought. Therefore, better offers for lower interest rates may be offered, thereby helping the reduction process.

However, just because the cards are around does not mean they should be used to the max. Remember to focus on reducing credit card debt; don't add to the problem. People are able to build up good credit with on-time payments in the process of paying the cards off. However, the key words are "on time." Late payments not only increase the interest and balances due, but those late payments will come back to bite in the future. At times, the difference between receiving a better loan or mortgage offer, lies in past financial history.

There are conflicting opinions on reducing credit card debts and payment policy. Some sources state you must conquer the largest amount first. After the biggest amount is paid off there is a downhill ride in paying off the small amounts. Other sources strongly recommend the "snowball approach" in reducing credit card debt by paying the off the smaller amounts first. This method works in that it seems to increase confidence and knowledge, as financial freedom is achieved step by step. Apparently, the largest amount can be daunting and unmanageable, so in reducing credit card debt one should work their way up.

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