It sounds easy enough, but take note of several things. First, how long is the introductory period? Legally, credit card introductory periods must last at least six months. Then, you will want to know what the APR is after the introductory period (lower is obviously better). Do some math and figure out how long it will take you to pay off your debts to see if this is worth it.

Various stipulations are associated with introductory rates . Make sure you qualify for the introductory rate in the first place – don’t assume you are always getting the advertised rate! The rate you get will depend on your credit. Also, you’ll want to know whether the introductory rate applies to balances transferred, purchases, or both. Understand which types of balances receive which rates.

Finally, balance transfer fees could increase your debt rather than reduce it, so verify any information about such fees before you apply.

Budget realistically, but if you are determined to reduce mortgage debt, you should be paying more than the minimum payment. Period. The faster you pay off your mortgage, the better off you will be financially. What does this mean? Reduce your mortgage debt as quickly as possible.

More frequent payments can help you save money too. Rather than making a monthly payment, try a biweekly plan. Pay half the amount you would pay every month, but pay it every 2 weeks. This can save you a significant amount of money as well as shorten the term of your mortgage, which is great news for you.

1. List all debts from smallest to largest balance. If two debts are very close, move the one with the higher interest rate above the other.

2. Pay the minimum on each debt, and put any extra funds towards the first debt on the list.

3. Once the first debt is paid off, cross it out and continue the process with the next debt on the list. Add the minimum payment from the previous debt to the current one.

Much of the success of this method can be attributed to human psychology. Bills are eliminated as the overall debt is reduced, producing positive feedback. Mathematically, paying off the highest interest debts first is optimal. However, in practice, the debt-snowball method may be the best method of reducing debt.

Let us look at a simple example of how to reduce debts using this strategy. Say Alice has the following amounts of debt and funds:

• Credit card 1: $100 balance, $25/month minimum.
• Credit card 2: $200 balance, $20/month minimum.
• Car payment: $5000 balance, $200/month minimum.
• Extra $50/month to devote to reducing debts.

Alice would pay $75 ($25 minimum + $50 extra) per month towards credit card 1, $20 per month towards credit card 2, and $200 per month towards her car payment. This continues until credit card 1′s balance is zero.

Then, Alice pays $95 ($25 previous minimum payments + $20 minimum + $50 extra) per month towards credit card 2 and $200 per month towards her car payment until credit card 2′s balance is zero.

Finally, Alice pays $295 ($45 previous minimum payments + $200 minimum + $50 extra) per month towards her car payment until all of her debt is eliminated. Every time a debt is eliminated, the payments from that debt are applied to the next debt to be paid off, resulting in a “snowball effect”.

Credit counseling, or debt counseling, is likely the first service you should consider to reduce your debt. They will assist you by consolidating your debt into a lower single monthly payment. This reduction in payment is usually 10-20%. Furthermore, credit counseling companies reduce your interest rates significantly, allowing you to get out of debt much quicker than you would be able to on your own. There are other side benefits, such as possibly improving your credit score.

Debt settlement companies are another service you can use to reduce your debt instantly. They help you negotiate with your creditors to agree upon a lower balance that will be counted as payment in full. This payment must be made as a lump sum. In some cases, you can negotiate directly with your creditors rather than through a company. Though debt settlement sounds attractive, be warned that there are negative aspects. Two major issues are the impact it has on your credit, and the forgiven debts are reported as taxable income.

Of course, not all credit counseling companies and debt settlement companies were created equal, so do your research.

Bankruptcy is a “last resort” option. Contact an attorney if you are interested, but be careful when considering bankruptcy. There are consequences associated with it, most notably the large negative impact on your credit.

First – lower spending. Yes, it’s obvious. Try tracking your expenses for a month and see where your money is going. Are you spending too much on coffee? Cigarettes? Cell phones? By tracking each expense, you will be able to easily identify if you are spending too much in any one place – when that money could be going towards reducing your debt instead.

OK, so you’ve already stopped spending on unnecessary things. What else can you do? One option to consider is consolidating your debt. You can do this with home equity loans or line of credit, refinance and use your equity to pay off debt, or get an unsecured loan. For some, credit card balance transfer offers may be of help as well. There are downsides to these debt consolidation options, and that is that they are limited by your credit rating. If you don’t have good credit, these may not be viable.

Debt management plans are good options to reduce debt quickly, even for those with less than optimal credit ratings. Enrolling in a debt management plan can net you lower monthly payments, lower rates, and lower balances. As an added bonus, it will help improve your credit.

Negotiating with your creditors is another possibility. This is known as debt settlement, and reduces the amount of debt that you owe. That’s right, you may only have to pay 50-75% of what you owe. This option is generally only a possibility when you are several months behind on a debt. However, there are downsides. Debt settlement can hurt your credit score, and often you will need to pay off the entire debt at once. It is attractive to many, but be sure to research all implications of settling.

One way to start effectively reducing your debt fast is to make take a hard look at what is needed in your life. Control your spending habits. Before buying that really cool gadget, ask yourself if it is really necessary. Try to only buy what you need. Make a shopping list before you go out and only buy the items on your list. If you are an impulsive buyer, avoiding sales may help as well.

This includes things like eating out at restaurants, cable television service, etc. For many, these luxuries can be hard to give up – but if you are committed to reducing your debt fast, it is necessary. It’s easy to justify such costs: “eating out only costs a few bucks more” or “this service only comes out to $1 per day”. While these statements may be true, every little thing adds up.

Credit counseling can be another way to reduce debt fast. Find a reputable credit counseling company and that will help you work with your creditors. This can result in lower monthly payments, lower interest rates, or even lower balances in some cases. What does this mean for you? Your debt is paid off faster.

Save enough cash to pay off a month or so of living expenses as an emergency fund. Pay only minimum payments and list your debts in order of balance. Pay off these debts in order from smallest to largest. This is not the most intuitive way to reduce debt, but it works. Eliminating debts provides motivation and momentum, and the smallest ones are the easiest to get rid of.

Why does this work? By focusing on paying off your debts one at a time, you are more likely to continue with the plan. Paying off the smallest balances is easier than the larger ones and it provides faster gratification. Becoming debt-free is a long-term process and, as with many long-term activities, it can be easy to lose motivation.

In summary: paying off your highest interest debts is the fastest way to reduce your debt, assuming you can stick to the plan. If that doesn’t work for you, you may want to try paying off your debts from smallest to largest.