If you're still struggling to pay off some of those credit cards, make a few changes to your spending habits this month to start shrinking some of that debt. While it might not be easy to just stop credit card spending altogether, there are some other things you can do to downsize that debt load. Reducing debt slowly can make the whole process less overwhelming. A gradual debt payoff plan can also help to "wean" you off your debt-dependent habits.
Here are five ways to shrink your debt this month:
1. Increase your mortgage payments. Your mortgage may be one of the biggest debts you're carrying right now so start tackling that one this month. Increase your mortgage payment by just 10 percent and make sure the bank knows that this is a "Principal Only" payment.
2. Consolidate just one credit card. If the idea of transferring all your credit cards to a single card or consolidating several cards to a handful seems overwhelming, just focus on one this month. Transferring the balance of one high-interest credit card to a 0% APR card can really help you save some money. Just make sure you read the fine print and are aware of when the promotional period ends.
3. Carry more cash. Start getting into the habit of paying with cash so you can stop adding to your credit card balance and actually get better at managing your money. Keep track of your cash withdrawals and spending throughout the week and you'll have a more accurate idea of your actual cost of living.
4. Prioritize your credit card debts. Make a list of all of your credit cards and balances so you have a "big picture" view of your actual credit card debt load. When you're carrying multiple credit cards, it can be easy to overlook how much debt you actually have. Put together a spreadsheet or just a simple list of all credit cards, current balances, and interest rates so you can see which ones need to be paid off first. In most cases, you'll want to pay down your highest-interest rate cards so that you're not accumulating debt just from interest alone.
5. Negotiate with creditors. If you've been very good about paying your bills on time and have a good credit history, call your creditors one by one and ask them to either reduce the interest rate or provide you with some more options for paying off your debt. A lower interest rate could help you pay off larger chunks of debt faster.
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