Millions of consumers are always looking for ways to get out of debt as quickly and easily as possible, but experts say one problem many may face is that they simply don't know how to begin doing so the right way.
Consumers who want to reduce debt and then keep their credit card balances low in the future need to do all they can to prepare for the process, according to a report from the New York Daily News. And often, experts recommend that the best way to do so is to start at the beginning. That means consumers should take the time to make a careful accounting of everything they owe.
When doing so, consumers should consider everything about these balances, such as how much they owe, how much will be added in interest or by fees on the accounts, and how much they would like to contribute to those debts every month in an effort to reduce them reasonably, the report said. Doing so for all credit card accounts they have will give them the full picture of their financial situation and help them to be realistic about how they'll be able to cut those debts.
When going through these accounts and seeing how much you'll need to contribute to the monthly bills to get out of debt within a given timeframe, consumers might also want to look at other aspects of their finances, particularly how much they spend every month, the report said. That's because taking the time to identify areas of inefficient spending might help them find places they can shore up their finances and cut out the waste, then put that money toward cutting outstanding balances.
In addition, consumers may want to look for new ways to increase their income, which can also help them reduce debt more quickly, the report said. This can include getting a job on the weekends or seeking out more overtime from their current employer when they have the time.
In recent years, consumers have been far more conscientious about cutting their credit card debt, and as a consequence have been successful in doing so. Rates of delinquent and defaulted credit card debt have fallen precipitously for all major lenders in the U.S. as a result of consumers increasing the value of their payments and borrowing less.