It is all many credit card holders can do to pay the minimum payment each month on the credit card bills. That is exactly what the credit card companies want. But it is more than the minimum balance due that the credit card holder should look at on their bills.
With the average household having over $8,000 in credit card debt, it will take years to pay off the debt if all they pay is the minimum due. So how can credit card holders reduce their debt? By looking beyond the minimum payment due.
Most people open up their credit card bill and look just at the minimum amount they have to pay. They do not take the time to look over their bill for errors or other items that is just adding to their debt.
When each credit card bill comes in, it should be reviewed for any charges that should not be on there. The amount of the charges should be verified that they are correct as well.
Most people just glance over at best the interest rate and the balance due on the card. This is one mistake the credit card companies love for credit card holders to make.
Credit card companies do not want people to realize just how much they owe or what the interest rate they are paying. They prefer that card holders just make their minimum payments since they can make more money off charging interests and fees for over-the-limit and late payments.
Congress has enacted the Credit Card Act of 2009 to help protect the consumers from some of the practices that the credit card companies have been doing over the years. The first phase went into effect in August and the rest of the act is being phased in over the next year.
Even with the new rules that credit card companies must follow, it is ultimately the credit card holder to be responsible for what is on their credit card bill and the debt they have. Making sure there are no mistakes and knowing what interest rate and the amount owed is the first step to paying off the debt.
The two best ways to reduce the time and money it will take to pay off your credit card debt is to first stop incurring more debt. Then pay more than the minimum balance. By paying extra each month, the balance owed will decrease dramatically.
If you have credit card debt and you are just making minimum payment then use this credit card calculator to see how long it will take you pay off the debt. You can also see how much you need to pay each month if you want to have it paid off by a certain time or how long it will take if you paid a certain amount each month.
Dave Ramsey gives great advice on tackling credit card debt in his book "Total Money Makeover" and on his daily radio show. Dave gives the advice to snowball debt.
Dave recommends to first tackle the smallest debt and then move to the largest debt. This method gives quick victories that keep the motivation going. Just like when someone is dieting, if they do not see their weight going down they will give up.
Once the smallest debt is paid off then the next step is to take the amount that was being paid on the smallest debt and apply that amount to the next smallest debt. In essence, creating a snowball effect.
There is no easy way to fast credit repair and it does take time to get out of debt. By paying attention to what is on the credit card bills and paying more than the minimum balance due, credit card debt can be reduced and even eliminated.
Written by Denise Clay
For Huliq
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