Getting into credit card debt is very easy. Credit cards are heavily marketed to consumers through the Internet, through the mail, and even in person at events and onboard aircraft. In addition, card issuers are willing to offer applicants large lines of credit with very little verification of their income. Finally, credit cards are so easy to use, that it barely takes a moment to charge thousands of dollars’ worth of purchases.
But once you are in credit card debt, you will discover that it is not only very costly, but it can also be extremely difficult to pay it off. As unsecured debt, the interest rates on credit cards will be higher than a loan that is secured by a car or a home. And if you continue to use your card for daily expenses, then your debt could continue to grow despite your payments.
How to start paying down your debt
As the saying goes, if you find yourself in a hole, the first step is to stop digging. Likewise, cardholders who realize that their debt is out of control should start by using another method of payment going forward. Doing so will accomplish three very important goals. First, your debt will not keep growing, and second, you will not be incurring interest on all of your charges. Third, using cash or checks will be less convenient and can act as a speed brake on your spending. The plan is not simply to reduce credit card debt, but to reduce spending as well.
Next, you will want to do everything possible to reduce the interest charges you are paying on your credit card debt. One option is to apply for a card that offers 0% APR promotional financing on balance transfers. These accounts allow cardholders to transfer and consolidate their existing debt from other credit cards, and the new balance will not incur any interest charges during the entire promotional financing period. Unfortunately, nearly all of these promotional balance transfer offers will have a 3% balance transfer fee added to the new balance. The exception is the Slate card from Chase, which offers 15 months of 0% APR financing on both new purchases and balance transfers, with no balance transfer fee. Other offers can extend as long as 18 months, giving you a valuable break from costly interest charges.