Schedule Your Free Consultation
Woman holds credit card in one hand and reviews a bill in the other

Top Tips to Reduce Credit Card Debt

After the holiday season comes a time that many people dread — bills. It can be easy to go overboard during the holidays and purchase gifts with a credit card swipe. But when the credit card bill comes a few weeks later, it can be a sucker punch to your pocketbook.

Additional debt can bring more trouble for individuals and couples who had significant credit card debt before the holiday season. Keep these tips in mind if you’re looking to start the new year with a fresh financial start, especially with credit card debt.

Payment Strategies

The first step you could take to reduce your debt is a payment strategy. A great place to get started with this strategy is by looking at your budget. Write down how much money comes in each month and how much goes out (make sure to account for more than bills such as groceries, gas, or other monthly expenses). If you have money left over each month, designate that money into savings or reducing debt.

One tactic to reduce credit card debt is paying more than the required monthly payment each month. This not only helps reduce the overall amount of credit card debt but means that you will be paying less in interest as your debt will be paid off faster.

Another payment strategy is called “debt snowball.” When utilizing this strategy, you focus on paying the smallest amount of debt first. After paying off that debt, you move on to the next smallest loan and continue pushing forward until your debt is paid off. On the flip side, a “debt avalanche” focuses on paying the debt with the highest interest first and then gradually paying off the next debt with the highest amount of interest. Either strategy is a great way to visualize paying off debt and feeling motivated after paying off a bill.

Debt Consolidation

There are hundreds of companies that advertise about debt consolidation. While the concept does make sense and may seem great on paper, there are many scams that can make it difficult to know who to trust. There are also ways you can do this on your own.

If you can, an option is to take out a loan and pay off your credit card debt from that account. Then, you can focus on paying off that one account rather than trying to keep track of multiple accounts and their various payment dates.

Talking to the Credit Card Company

If you have severe credit card debt and haven’t been making payments, you may have credit card companies calling you or sending threatening letters. This can be intimidating especially if your financial situation isn’t improving.

However, some credit card companies may be willing to work with you to reduce your debt and pay back what you owe. One plan they may suggest is a large sum payment. This is when they offer you to pay off your credit card debt for a lesser amount than you owe. For example, If you owe $10,000, the credit card company may offer a lump-sum payment of $7,000. This helps the credit card company retrieve some of the money they wouldn’t have otherwise while you don’t have to continue making payments and earning interest.

Another plan the credit card company may offer is a hardship agreement. In particular, if you lost your job or spent time in the hospital recently, you could ask the credit card company if they are offering a hardship agreement. If they agree, you may temporarily not have to make monthly payments, but interest will continue to accrue and you will have to pay back the debt eventually.


Bankruptcy makes more sense in some cases than continuing to let your debt and interest go up. Your credit score will be lowered if you go this route, but your credit score was already taking a hit by each monthly missed payment.

Between Chapter 7 and Chapter 13 bankruptcy, there are options available to reduce your credit card debt. When you’re looking for the most experienced Springfield bankruptcy lawyers, turn to the team at Licata Bankruptcy Firm. Our skilled and compassionate attorneys will review your case and layout the best option to get you back on track financially. See what past clients have said about us and reach out today for a free consultation so we can help you.