How to Reduce Credit Card Debt, According to Roy McDonald

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According to Roy McDonald, credit card debt remains a major problem among many consumers—and in fact, the sheer volume of credit card debt that the average consumer carries might truly shock you. U.S. News and World Report notes that the average American has around $7,000 in credit card debt, a staggering figure. The rate is actually a little better in other developed economies.

There are plenty of ways in which people can fall into the credit card trap. Unforeseen medical expenses, moving costs, unemployment, or simply poor financial planning can cause a debt spiral that forces an individual to abuse their credit. According to Roy McDonald—Australian wealth management expert—the more pertinent topic is how consumers can reduce their debt.

Certainly, credit card debt is a burdensome thing, but McDonald says there are plenty of ways to minimize that burden. “There are many ways to reduce credit card debt,” he explains. “Consumers simply need to know what the options are.”

Knowing Where You Stand

According to an article from, one of the most important steps in the process is making a frank appraisal of existing debts—something that many consumers would rather avoid.  Although the harsh reality can be shocking, it’s really the best place to start.

“Collect all your financial documents and print out your credit reports to see exactly where you stand,” advises. “This is an important step toward debt recovery and one that people are often scared to take. On a piece of paper, write down the balances, interest rates, and monthly amount due for each of your debts. Include your auto loans, personal loans, payday loans, credit cards, and other debts. You should also make note of any annual fees on your credit cards. You don’t need to include your mortgage loan or student loans at this time. These loans have relatively long terms and low APRs so it is better to focus on paying off your other debts first.”

Says Roy McDonald, “Surveying your current debts is an important step before you can work toward making a new budget—one in which you’re making more consistent credit card payments.”

Working Toward a Budget

Budgeting is the next step, according to “Write down your monthly income after taxes and subtract your rent/mortgage payment from this amount and other monthly expenses such as childcare, student loan payments, insurance, utilities, and groceries. Once you have subtracted all of your expenses, calculate how much you have left to pay off your debts.”

If the amount of money left over to pay off debts is negligible, it is important to find some ways to curb spending—by canceling the cable (or perhaps just swapping it out for Netflix), or by eating out with less frequency.

U.S. News & World Report, meanwhile, advises consumers to use online budgeting services like to help with the establishment of their budget. The article also advises consumers to cut down on purchases that are not really necessary: “Track your expenditures for a week to see how much you spend on minor, everyday purchases. Cutting back or eliminating discretionary expenses such as fast food and Starbucks coffee can make a big difference to your bottom line.”

Making a Plan

Once a budget has been set, the next step is to formalize a plan. “Use the information from your debt report, as well as your budget, to calculate how much you have to make monthly debt payments,” Roy McDonald advises. “Start by paying off the card that has the highest rate and balance.”

“Continue this cycle each month until the debt is paid off and then move on to the next highest rate/balance account,” advises. “This may seem like an odd process, but it is the fastest way to reduce your debts. During this time, you should not add any new charges to your credit cards. Also, try to increase the amount you pay toward the most expensive debt each month.”

Attempt a Negotiation

Roy McDonald also notes that consumers can try to negotiate with their lenders for better rates. “By speaking with the customer service team, you can possibly get your interest rates lowered, or you can negotiate a reduced settlement,” McDonald notes. “Remember that your lenders really would prefer you to make payments, not accumulate debts that you’ll never be able to pay, so they are often willing to work with consumers to make things easier.”

A related tip is to move some of a credit card debt to a new card—one with a 0 percent introductory rate for the first few months. This could potentially lead to huge savings on credit card interest.

Keeping at It

“The only way to completely pay off your credit card debt is to keep at it, and to do that, you must keep yourself motivated,” affirms U.S. News & World Report. “Don’t make it all about punishment, guilt or sacrifice. Create goals and set milestones by which to measure your progress.”

“Reward yourself for making progress—but don’t go overboard and land yourself in even deeper credit card debt,” concludes Roy McDonald.