Posted on | November 4, 2010 | 2 Comments
Credit card reduction is not the only way to cut down your debt. People who have outstanding balances are on a constant search of the best debt reduction strategies that they can do. Just because you lessened the number of credit cards that you have, it will not ultimately solve your debt problems.
The thought of becoming financially free and stable is very tempting, thus many people want to reduce their debts as quickly as possible. There are debt reduction programs as well as financial counseling that you can do to achieve freedom from debts. Apart from those things, here are several methods that you can do:
Stay away from stores for the meantime
If you want to reduce your debts, as much as possible try to stay away from shops – that is for the meantime, until you are able to keep track of your purchases and balances. For example, imposing self buying control will help you from spending money on unnecessary things. Remember that your credit score is not only based on your ability to pay your dues on time. Sometimes companies also score you for the purchases that you make. If you buy items or products that are really needed by an average person to live, then your credit score rises.
Use cash if you can
The path towards credit card debt reduction starts with you using cash in favor of credit cards. Again this is for the time being. Once you are able to pay off your debts as well as the interest rates, you can use your credit cards again.
The thing about using credit cards for usual purchases is that you accumulate more debt because of the interest rates charged by the credit card company. If a box of milk costs a little over $2, it will cost more once you used the credit card to purchase it because of the interest. Credit card companies usually charge its clients with 2 to 4 percent interest rates.
Create a budget
This is probably the wisest decision that you can do to avoid getting indebted. Whenever you have money or after receiving your salary, make your budget plan. Credit card reduction starts with proper accounting for of your funds and allocating them to your needs. You must also prioritize your payments like credit card bills to prevent your balances from increasing because of the interest rates. Create also your emergency fund for those unexpected expenses.
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