As you begin to build up credit, you may see your card balance rise. There is no need to panic just yet, as using your card is an integral part of building up your credit. Making small purchases such as buying coffee in the morning or going out to lunch once a week is fine, but spending well beyond your financial means is counterproductive. If you are constantly using your credit card for every single purchase, you will eat up a good portion of your credit limit. Getting yourself in a huge amount of debt can be bad, but you can try a few of these methods to cut down your credit card balances:
Look at past spending habits
The first step of this process is to figure out why you are in credit card debt. Take a look at your last credit card statement and see what your spending habits were. If you need a larger scope of your spending, check out a few more statements from the last couple months. Many credit card issuers and banks now have online archives of your credit card statements, so these documents shouldn't be too hard to access. Once you pinpoint the causes of your overspending, you can begin to cut down your balance.
Cutting down on expenses
A good way to get your spending under control is to make a budget. The actual act of sitting down and writing out a budget may seem daunting, but it is much easier than you think. Simply jot down all your expenses. It will also help if you can come up with an average amount you spend for each expense. After everything has been written out, look at areas where you can cut down on. Maybe you can only use your credit card for smaller purchases and use cash for the rest of your bills. By reducing how much you use your credit card, you will be able to save in no time.
Paying more than the minimum
To cut down your balance, you can try to pay more than your monthly minimum payment. This can be completed by either paying a large sum once during the month or making small payments every other week instead of one large one. Separating these payments out can also help you plan out when you will pay for other expenses and bills.
Cut down the high-interest principal
If you have more than one credit card in your name, you may need to try different methods in paying back your debt. Continue to pay a little more than the minimum on each card, but focus on paying even more for the card with the highest interest. A card with a high interest rate will continue to charge you expensive payments as long as you have a high balance. By getting the principal of this card taken care of, you will be able to get the interest down and decrease your overall balance.
To help with a high-interest card, you can investigate whether you can transfer the balance of this account to a new card with less interest. Consult with your card issuer whether this is an option for you. Also, be aware that many financial institutions will charge a transfer balance fee for this service.