With more consumers turning to credit cards for purchases, revolving debt rose by $8 billion, increasing the total credit card debt to $870 billion, according to the Federal Reserve.
Howard Dvorkin, CPA and founder of ConsolidatedCredit.org warns you to reduce credit card spending as the recession is not over. “Faced with layoffs and high prices, consumers rely on credit cards to cover basic expenses,” says Dvorkin. “While the economy is slow, consumers need to make an effort to avoid excessive credit card spending.
Here are tips for paying off credit card debt:
· Pay more than monthly minimum: Try to pay more the than just the minimum amount due. Any amount paid over the minimum goes directly towards the balance owed. This allows debt to be paid off faster reducing overall interest.
· Set priorities: Making a list of priorities helps consumers to focus on saving money for important goals. Consider whether a summer trip would jeopardize the purchase of a house.
· Avoid accumulating debt: Now is not the time to apply for new credit cards or loans. Focus on paying off current debt. It’s difficult to get out of debt when new debt is mounting. Use cash for purchases rather than credit.
· Pay off high interest rate debt first: The most efficient way to resolve debt is by paying down the highest interest rate balances first. Once high-interest debt is paid down, tackle the next highest, and so on. Continue paying the minimum due on all other debts.