Wouldn't it be nice to not owe money, to not have balances on your credit cards?  It is possible and it feels great to know you don't owe.  So how can you reduce your debt?  Here are 5 ways you can.

1. Stop spending more than you make.  Americans are consumers, we love to buy things, have things, touch things, get the latest gadget, you name it, stuff, and more stuff.  The one with the most toys wins, right?  Well maybe, but living within your means is required here.  This means you do not need a $2000 TV, or a $500 purse if you can not pay cash for it.  It is okay to pay with your credit card, it does give you some good "protection" but you must be able to pay off that card with what you already have in the bank.  You must cut down on how much you go out to eat.  $40-75 a night to eat out is great once a week, but next Tuesday when you don't feel like cooking is not a valid reason to charge a dinner out.  Do you know how much you spend on coffee each year?  I bet you put less in your 401k than you spend on coffee....  Think about it, what is that coffee doing for you, besides costing $4.

2. Pay more than the minimum payment.  This is optional, optional only if you want it to take less than 30-38 years to pay off your credit cards.  So if you want to live in debt for the next 30 years pay the minimum, otherwise start paying more, something even $20 will get that bill down.  Use your tax refund to pay down your debt instead of buying some large big ticket item.  No idea where to find an extra $20, here is an idea.  Next Tuesday when you were going to go out to eat, skip it and eat at home.

3. Create a repayment plan, and stick to it.  You must get behind paying off your debt and there are loads of different approaches.  I'm going to suggest one, that you pay off your smallest account first and work your way up from there.  By paying something off you will feel like you have accomplished something and stick with it.

4. Get better terms.  Ask your credit card company if they can reduce your rate, threaten to close the account if they don't.  Save 2% on a $5000 balance and $100 more a year is going to pay off your balance than in the banks pocket.  A couple phone calls and you could save some real money.  Look for cards with better terms like zero or low intrest rates.  See if you can consolidate your debt, but if you use this approach it is not a ticket to charge up those cards again!

5. Stop getting more credit.  Goes right back to number 1.  You need credit cards in todays society to pay for things, but not to buy things you can't afford.  When the clerk at Old Navy, or Target, and any other store offers you 10% off by getting a credit card, skip it.  You are just buying yourself another debt trap.  When they ask if this will be on your ____ card, tell them no, it will be on cash thank you.

You can get out of debt, stop spending more than you can, pay more than you have to, create a plan and stick to it, get better terms if they are available, and stop getting new credit.  Before you know it you will be debt free.