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Find the right credit card debt reduction strategy for your budget.
You may be wondering why you need a debt reduction strategy. After all, credit card companies offer minimum payment requirements on your monthly credit card statements, so why can't you just use them?

Namely, minimum payments don't work that way because a minimum payment program is not designed to get you out of debt quickly or efficiently. Credit card companies make money on this plan because interest is the cost you pay to carry balances from month to month.

Even creditors themselves will tell you that you need to pay off your debt faster in order to actually use your credit cards effectively. In fact, thanks to the Credit Card Act of 2009, your credit card statements carry a minimum payment warning that shows exactly how many years and how much you will pay in interest charges using minimum payments, as well as how much you can save by making a more reasonable fixed payment schedule.

Why it is important to focus on one debt at a time
If you notice, in the two debt reduction strategies described in the video, your attention to reducing debt is always focused on one debt at a time while making minimum payments on all others. The reason for this is efficiency and, in the case of the "tiger style" strategy, cost savings on interest charges.

By focusing your energy on one debt at a time, you give yourself the incentive you need to continue with debt reduction: as you eliminate each debt it gives you motivation to move on and finish the next one. If you have 10 credit cards, each with a $1,000 balance, and you try to eliminate them all at the same time with equal payments, you're likely to keep paying those 10 bills every month for the next few years until you're finally debt-free. It's hard to stick to your strategy if you don't have any real proof of your progress.

On the contrary, if you focus on a single debt, you gradually start cutting one bill at a time. After a few months, you will only have balances on several different cards, different interest rates will apply each month.