"One can consolidate credit card debt by setting up a financial plan of action. According to the data of a research, on an average if a family has credit card debt of $7000, they pay $1000 every year as interest," a recent study showed.
The interest a person pays can be used as part of their savings or can be used on other productive investments and personal needs. To have a low debt rate people now join debt consolidation programs which in many cases help reduce debt.
In order to have low debt and to decrease debt which has already accumulated, a person can take certain precautions and actions to reduce debt and prevent the debt from further increasing.
The easiest method to reduce debt and prevent further increase in debt is to stop using your credit card. Credit card usage leads to a constant increase in debt and every person is advised to use only one credit card, as less frequently as possible and the credit card should have a low interest rate. Most people are encouraged to cut up their other credit cards to ensure their debt does not constantly increase with the usage of more than one card.
Credit cards should only be used in case of emergencies only. People who have credit cards with high Annual percentage rates can apply for cards with lower annual percentage rates and move their debt onto the new plan in order to pay less interest on their debt. This is an effective method to come out of debt quick.
People who have more than one credit card can start paying off debt in the credit cards with lower interests rates, which makes repaying loans easier and as they clear loans with smaller interest rates, they will be able to eventually pay loans with higher interests without hassle. This method can be used to clear loans faster.
Credit card debt can be reduced faster by clearing higher interest credit cards first. Paying loans with higher interest rates can reduce the interest which accumulates along with the debt and can save the user lots of money. Consumers can also join credit card debt consolidation programs on the internet which are effective and are knows to reduce the debt consumers own by almost 50%.
Homeowners, who wish to be involved in the credit card debt consolidation program, can also join the home equity loan programs. Home loans are secured loans which have low interest rates and are ax deductible. This helps homeowners reduce debt at a faster rate.