Standard Balance Reduction Methods

• 1). Create a budget by laying out all your monthly bills and writing down your income alongside all living expenses.
  
  
• 2). Determine whether you'll need to find an additional source of income, or whether you can cut living expenses.
  
  
• 3). Consider making lifestyle changes such as moving to a smaller place, selling your car or cutting your entertainment costs---just remember to put this extra money toward your credit card debt.
  
  
• 4). Cash out on credit card rewards points instead of spending your own hard-earned cash. This enables you to re-direct your money toward your debt.
  
  
• 5). Talk to your credit card company about your options. Lenders want you to pay off your debt, so sometimes you can work out an agreement that enables you to work toward your goal. Some card lenders will arrange a lower-interest payment plan.
  
  
• 6). Work with a reputable credit counseling organization to learn strategies for lowering your debt. A good organization should offer free information about its services and fees, review your financial information thoroughly, and teach you money management skills.
  
  

Extreme Measures for Debt Reduction

• 1). Save up some money for a debt settlement. A debt settlement will likely hurt your credit score, but it forgives a portion of your debt so that you can afford to pay off the remainder.
  
  
• 2). Prepare an offer for a settlement, and start low. For example, offer to pay 25 percent of your balance.
  
  
• 3). Get your terms of agreement in writing, once you and your credit card company have settled on a payment amount.
  
  
• 4). Claim the forgiven amount of debt as income on your taxes.
  
  
• 5). Consider filing for bankruptcy if settlement isn't an option.