Don’t let credit card debt ruin your mood, your relationships, or your life. You can reduce your credit card debt by following a few simple steps. The process will not be easy, but it can be simple. Getting rid of credit card debt completely takes a lot of determination and willpower. It’s very easy to put old clothes back on and start charging everything. Just remember what you got into financial trouble to begin with! The ability to learn from past mistakes is very important to your financial future.

Two Simple Steps to Credit Card Debt Relief

Step One: Stop taking on new debt. Stop using your credit cards for unnecessary items and cancel all recurring payments. These automatic charges can range from a monthly gym membership to automatic bill pay or even online gaming accounts. If any of the companies you deal with require you to register a credit card for automatic payment, consider using a checking account debit card instead. Your debit card does not charge interest.

Step Two: Contact your creditors and try to negotiate lower payments and interest rates. In some cases, they can even waive late fees. Many companies are willing to work with you because they would rather receive part of the money owed than nothing. After negotiating with your creditors, you may find it beneficial to consolidate all of your credit card debt onto one credit card. This can be accomplished by transferring all balances to the card with the lowest APR.

Another option for consolidation is to apply for a low interest unsecured personal loan that will allow you to pay off your credit cards in full. In some cases, you can also borrow against investments like stocks, your mortgage, health insurance, or even your 401K. If you find it impossible to consolidate all your balances onto one card or if you can’t get a loan, the best thing to do is pay more than the minimum payment each month. The industry standard for the minimum payment is 2-3% of your balance. If you continue to make only the minimum payments, you’ll be paying off a small debt for many years. Don’t fall victim to paying hundreds of dollars on a $15 purchase.

Before you start paying more than the minimum, it’s a good idea to create a savings account. This will allow you to have an emergency fund and you will not have to resort to using your credit cards if unexpected expenses arise. Once you’ve established an emergency fund, you need to gather all your monthly bills and figure out how much you can pay off your credit card debt each month. At this point, you have two options for payment:

Option One: Pay the minimum amount due on all cards except the card with the highest interest rate. For the high interest rate card, you must not only pay the minimum balance, but also put the rest of your monthly allowance on this card. Paying off the card with the highest interest rate will keep you from paying hundreds of dollars in interest over the long term.

Option Two: Put additional funds on the card with the least amount of debt. Paying off the card with the lowest amount of debt will ultimately free up more funds in your monthly budget. That money can then be applied to the cards with the highest interest rates or used to pay off another card with a relatively low balance.

The option you choose should be based on the total amount of money you will end up paying. You should also consider how quickly you can eliminate your credit card debt with each method. Every situation is different. Each individual must choose the debt payment method that best benefits her lifestyle.

Once the first card is paid off, don’t change your monthly allowance for credit card debt. Just continue to put all the extra money on your other credit cards. When your credit card balances have been paid off in full, keep your cards under lock and key, but don’t cancel them. This can have a negative impact on your credit score. Simply saving them in case of an emergency or learning to use them responsibly can boost your credit rating and save you from bankruptcy.