5 Smart Ways To Rid Yourself Of Credit Card Debt

5 Strategies to Pay Down Credit Card Debt

As tax season disappears in the rear view mirror, one subject that seems to get a lot of attention around this time is credit card debt. If you’re one of the many Americans with sizable credit card debt and you just received a fat tax refund, you might be trying to find out how you can use part of that money to help escape the monthly grind of credit card payments.

While a large refund is the first step, the key to paying down credit card debt is more systematic than a large payment. You need to change your behavior and adopt some of the strategies I list below in order to truly escape credit card debt. Although the tax refund won’t hurt, it may not be enough to keep you out of debt.

Start Budgeting

Paying off debt is just like losing weight — it’s a numbers game. Consume more calories than you expend in a day, you will accumulate fat. Spend more dollars than you earn in a day, you will accumulate debt. The ugliness of debt is that it’ll keep growing even if you get your numbers in balance. Imagine if every pound of fat on your body continued to grow at 19.99 percent a year… now you understand the insidious nature of debt.

To combat this, you need to shed that debt and the only way to shed it is to spend less, putting those savings toward that debt. Conversely, you can also try to earn more and put the additional earnings toward debt. Either way, you will need to start budgeting in order to find the extra dollars. You will not succeed at killing your debt if you do not know how much extra you can afford to pay each month.

Consider Balance Transfer Offers

The best credit card balance transfer offers are for zero percent interest for at least one year, which gives you the opportunity to pay down your debt as quickly as possible. With every penny going toward principal, rather than double digit interest rates, you have one full year to catch up. These offers usually have a transfer fee, somewhere in the neighborhood of 3 to 5 percent, but that fee is likely much lower than the interest rate you’re currently paying.

When researching an offer, be sure to understand the balance transfer fee, the promotional period, and the expected interest rate after the promotional period expires. The interest rate is likely going to be similar to what you’re being charged now. Finally, do not use the credit card at all — the new debt will accrue interest at the non-promotional rate.

Continue reading this article at Finance.yahoo.com after the break!