Yes...You Can Reduce Your Credit Card Debt

You probably have several reasons for wanting to reduce their average credit card debt. If you want to buy a house in the next year or so, you probably know that mortgage lenders frown on high credit card balances, and reducing your credit card debt will get you a better rate on a mortgage. Even if you already own your own home, or you are not in the market to buy a home, you may find that you are uncomfortable with the high amount of your credit card debt, or you want to reduce your monthly credit card payments so you can have more disposable income.
The best way to reduce your average credit card debt is to cut back on your other expenses and use the amount you save each month to pay off your credit card balances.
Keep A Spending Diary
Most people are not aware of what they spend their money on. Sure, they pay their debts online or write checks to pay their living expenses, but they do not categorize their day-to-day expenses, so they have no idea how much they could reduce their average credit card debt by cutting back on expenses.
The first step in cutting back is to know what you are spending your money on. For one week, track everything you buy with cash, checks, credit cards, and debit cards. If you like to work with paper, get a small notebook you can carry with you at all times, and write down each item as you purchase it. Don’t wait until the end of the day to track your expenses; studies have shown that people underestimate their expenses when they try to remember what they purchased. This may seem like a burden, but it is not as much of a burden as credit card debt can be.
If you can’t be bothered with a notebook, use your cell phone to keep track of your expenses. If your cell plan offers free text messaging, send yourself a text message every time you buy something. At the end of the day, you can read your text messages and enter the information into a spreadsheet. If you can reduce your average credit card debt, all this recordkeeping will be well worth the effort.
After you have itemized one week’s worth of expenses, go over each item and ask yourself whether you really needed that item and, if you did, whether you could have purchased a less expensive alternative. You can reduce your average credit card debt by cutting back on those items that you can easily live without.