How To Pay Down Your High Interest Debt Without Feeling The Pinch

Posted by Steve on August 31st, 2008

Are you one of the millions of Americans that have a credit card bills each month that, added together, seem to engender the same response in you as a novice climber would have when setting their eyes on Mount Everest? Many feel that the debt they have accumulated over the years is uncontrollably and irrefutably overwhelming. We all know from the many commercials which are advertised on the television from so called do-gooders and financial analysts that the minimum monthly payment is virtually all interest and it takes years and years to pay off a card when only choosing that option each month. Yet with the economy in shambles and the cost for goods at an all time high coupled with stagnant wages, how does one come up with a better alternative?

Well, a multi-pronged approach is in many cases the best route to take.

The first step is to analyze how high the interest rate is on each of your credit cards. There are many credit cards out there that lure new customers in by offering a 0% or very low interest rate on balance transfers for at least 6 months. Take some time to do the math and see how much you would save by just paying the minimum payment amount for 6 months, but instead of it just going in the bank’s pocket, it would go directly toward paying down your principal. However, there is need for a word of caution; make sure to determine what the interest rate will adjust to on the new card after the introductory period. As long as that is competitive, then transfer your balances over and enjoy the savings! (See: Balance Transfer Cards)
Secondly, for many of us the fact that we didn’t compromise our desires and wants is probably the reason we are in the situation we find ourselves now. We really need to cut back in areas of spending that are frivolous. Taking 10 or 15 minutes to do this will often reveal a significant amount of money we could put towards credit card bills instead of our daily Starbucks fix, going to the mall shopping to kill time, or buying expensive clothes; and the list goes on. How bad you want to get out of debt will determine how much motivation you bring to the table.
Lastly, commitment to a long term plan of action is necessary. It took a while for most of us to get into substantial debt; it will also take time to remedy the situation. However, by committing to this new financial responsible attitude each month one can see themselves chipping away at that mountain of debt and over a relatively short period of time, it will get much more manageable.

These 3 strategies used in cohesion with one another can limit the difficulty of paying down your credit cards and the feeling that your situation is insurmountable. Pretty soon, you will once again be one of the few, one of the proud that can call themselves debt free!