In the current global economic climate many credit card holders are striving to keep up with their credit card bills to prevent any defaults of their credit report. Rising household costs means that the average consumer is now dealing with more expenses at a time when job losses are rife. Consolidating or reducing your credit card debt can go a long way to reducing the stress on your monthly budget and rebuilding your credit report.

Bob Jones, 45, of Phoenix, AZ had several defaults on his credit card debt and was feeling the pressure of his credit card commitments. Bob knew that this was affecting his good credit report and may hamper his long term credit worthiness. A financial planner himself, Bob knew he had to take action immediately to prevent his credit card debt from crippling him financially.

A few simple credit card debt tips that could put you on the path to reduced debt and an improved credit report

1. Monitor your credit card spending habits

The first mistake people often make is to ignore their spending habits. If you are dealing with credit card debt, it is time to get rid of those unnecessary items on your shopping list.

2. Do not accept any further credit limit increases

It is very tempting to have your credit card limit increased and to have more buying power. But ask yourself a question, “Do I really need the increase?” or more importantly “Can I afford it?”

3. List all your credit cards in order of importance

If you have more than one credit card, list all of them in order of importance and note their corresponding minimum repayments. This will help you gauge your minimum monthly contributions for your credit cards. You should first settle those credit cards with a higher interest rate.

4. Speak to a representative from the Credit Card Company or the Bank

It might be a good idea to call the bank or the credit card company and inform them that you are currently in a difficult financial position. They might be able to help you by either reducing your minimum payments or you may qualify for a lower rate on your credit card. A reduction in interest rates goes a long way in paying off those credit card debts quicker.

5. Increase your monthly credur card contributions

You should try to increase your monthly minimum repayments on your credit cards. This not only helps you improve your credit report faster but also shows lenders and banks your dedicated approach to paying off a credit card debt.

6. Use increased earnings for higher credit card contributions

Have you earned a bit of overtime this week? Received a bonus or pay rise? Use any additional earnings to plough it back into your credit card debt and improve you debt situation faster.

7. Track your credit card debt repayment progress

Visual tools can go a long way towards helping you reach your goals faster and help you stay focused towards paying off those credit cards. Monitor your monthly progress on a chart and put it up on the bathroom mirror or on the refrigerator. This will help you stay focused and determined to pay off that credit card debt faster.

8. Consolidate your credit card debt

If you have lower interest rate credit options, use it to pay off your credit card debt. In most cases, credit card interest rates are significantly higher than other forms of consumer credit. Speak to a financial consultant at your bank and weigh out your options.

Bob had paid off more than half of his mortgage and decided to borrow a small amount from his bond to settle his credit card debt and close these accounts. Being a financial planner, Bob knew that consolidating his debt in this manner is not always advisable but his reduced income over the past few months meant that he was on the verge of defaulting on his credit card debt. This could seriously impact on his credit report.

Bob may have added to his mortgage loan but he can now just focus on one consolidated loan and contribute his regular monthly credit card repayments into his mortgage. More importantly, Bob cannot spend as freely without a credit card thereby preventing any unnecessary expenditure.

Keeping these simple facts in mind could not only help to vastly reduce your credit card debt but would also help you dramatically improve your credit report.