When entangled in credit card debt, it is oftentimes difficult to envision financial freedom. By applying earnest efforts and appealing to discipline, will power, and perseverance, however, consumers can pay off credit cards and eliminate credit card debt. The key to avoiding a potentially irreversible impact on their financial health is for debtors to take immediate action by implementing the following methods of credit management:

1. Spending Restraint

Cardholders should compare their income to their expenses. If the latter outweighs the former, they should create a budget and look for ways to cut costs and generate money. For instance, they can reduce their spending by shopping around for cheaper auto insurance, postponing home renovations, cancelling gym memberships, and choosing not to renew magazine subscriptions. Similarly, such a seemingly low-effect expenditure as eating out on workdays can amount to significant savings when replaced by home-prepared meals. A $10 lunch five times a week adds up to more than $2,300 a year- an expense that could be avoided by brown bagging meals and a sum that could be allocated to credit card debt elimination. Consumers should also refrain from making minor purchases with their credit cards.

2. Snowball Method Of Repayment

This extremely popular approach to paying off debts involves the following steps:

First, all credit cards should be listed in chronological order, from the highest balance to the lowest balance. Debtors should start paying as much as practicable on the card with the smallest balance and the minimum amount on the remaining cards. Upon paying off the card with the lowest balance, borrowers should apply the same amount paid towards that card to the next card with the lowest outstanding credit debt. The procedure should be repeated until all card balances are paid off.

Consumers may also endorse another tried-and-true approach to credit card debt elimination, which consists of the following steps:

All credit cards should be listed in the order of decreasing interest rate. The card featuring the highest interest rate should first be paid off entirely, and the minimum balance should be paid on the remaining cards. The amount paid on the first card, in addition to the minimum payment due on the second credit card should then be applied to the second card until the balance has been paid off. At the same time, the debtor should pay the minimum amount on all the other cards. The process should be continued until all credit card balances are wiped out.

3. Lump Sum Payment

Another credit management option is for consumers to take a lump sum out of their savings account to pay off the balance on their credit card(s).

4. Request For An Interest Rate Reduction

Debtors should contact their credit card companies to shave off percentage points from their interest rate. Lenders usually accommodate clients with a lengthy, consistent payment history by reducing their interest rate. This in turn translates into lower monthly payments and enables consumers to pay off credit cards more quickly.

5. Balance Transfer

Cardholders may also consider applying for a new card featuring an attractive rate that will permit them to transfer their balance.

6. Debt Management Programs

Another strategy to eliminate credit card debt involves utilizing credit management services, which can assist defaulting consumers in a number of ways:

Negotiate with lenders to lower interest rates, finance fees and charges, as well as to decrease monthly payments Prepare a debt management plan Develop a manageable budget Provide individual counseling Put an end to creditor harassment Assist debtors in credit card debt consolidation, whereby their credit card bills are combined into a single monthly payment Engage in credit risk management by relying on credit scoring