5 Ways to Reduce Your Credit Card Debt Starting Now

There is a long list of excuses, but paying your way out of credit card debt isn't as hard as it sounds.

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The average American has around $7,000 in credit card debt, according to an estimate by NerdWallet.com released this month. Some people give a long list of excuses for why they've landed in such financial trouble, but paying your way out of credit card debt isn't as hard as it sounds. It's worth a few hours of your time to save hundreds or even thousands of dollars by following these steps:

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David Bakke
1. Create a budget. The first step to solving your debt problem is to establish a budget. Use an online service like Mint.com or list your monthly income and expenses on a spreadsheet or a piece of paper. Next, establish whether you're spending more than you make. If so, the situation is dire. If you don't scale back your spending, you'll dig yourself into a deeper hole. Review your expenses to find areas where you can cut costs.

2. Reduce your monthly bills. Some of your regular monthly expenses aren’t set in stone. Can you get by with a cheaper data plan for your smartphone? Do you really need all those TV channels plus paid movie services? Can you reduce home energy expenses? Review your statements and subscriptions, as there are a number of money-saving opportunities for regular monthly services.

3. Cut down on unnecessary purchases. Track your expenditures for a week to see how much you spend on minor, everyday purchases. Cutting back or eliminating discretionary expenses such as fast food and Starbucks coffee can make a big difference to your bottom line.

4. Rethink entertainment. Going out to dinner several times a week adds up fast – as do trips to the movie theater, bars and other entertainment venues. Work to replace at least one expensive entertainment outing per month with something more fiscally prudent. Replace dining at a restaurant with cooking at home. Another money-saving strategy is to forfeit going to the movie theater, and rent from Redbox instead. Considering the cost of tickets and refreshments, you and your significant other could easily save $40 per trip.

5. Reward yourself along the way. The only way to completely pay off your credit card debt is to keep at it, and to do that, you must keep yourself motivated. Don't make it all about punishment, guilt or sacrifice. Create goals and set milestones by which to measure your progress. For example, if you aim to reduce your credit card debt from $10,000 to $5,000 in two months, give yourself more than a pat on the back when you do it. However, keep in mind to reward yourself within reason. Maybe take a weekend camping trip or have your car detailed rather than book a week-long vacation.

Final thoughts. Many people rack up credit card debt – it’s what you do to pay it off that's important. The first step is to look your debt square in the eye, and make a commitment to yourself to get rid of it. You can do it. In fact, you can do it right now. You just need to start.

David Bakke managed to climb out of $30,000 in personal debt, which he racked up during his college years. He now shares how to prevent credit card debt on the blog Money Crashers.