The simplest way to avoid poor debt is to organize your expenses, set a particular budget, and stick with your limit. But what if you are stuck in credit card debt after the holidays? What would you do in order to get away from the situation? On this post, we share tips for cardholders the way to manage debt: 

1. Look at your accounts. Guarantee that there isn’t any incorrect charge in any of your accounts, particularly if you have balances on multiple credit cards. In case you see errors, call up your credit card issuer immediately to dispute the fees. This way, you can be assured that you are not spending money on debts you didn’t owe.

2. Prioritize your debts.  If you are dealing with multiple credit card debt, see which of your accounts have the highest rate.  If possible, pay off your full balance on this account to stop debt from further accumulating.  Be sure to submit the minimum due payment on the credit cards that you can’t pay in full to avoid late fees.  Afterwards, you can work on paying off your debts from one card to the next.

3. Consolidate credit card debt.  Another strategy is to transfer balances from your high rate credit cards to a card with a low rate.  This way, you can avoid expensive APR charges while you work on debt repayment.  You may also apply for a credit card with zero balance transfer rate.  However, before you do, there are some things you should consider.

Make sure that you will have sufficient time to completely pay down all the balances you transferred.  How long with zero interest rate last?  How much will the regular rate be when the introductory period ends?  How much is the balance transfer fee?  Furthermore, be careful that you do not max out or exceed your limit as this can badly pull down your credit score.

4. Minimize your spending.  You will be able to pay off your credit card debt more quickly if you can cut back on your monthly expenses.  Find ways to minimize your costs so you can focus on debt repayment.

5. Stop incurring new debts. Don’t use any of your credit cards for new purchases.  If you’re done paying off a balance on one card, see to it that you do not incur new charges to this account.  Some people even place their credit cards inside a freezer to literally freeze them and discourage them from spending.

6. Don’t cancel old credit cards.  Some people may think that the best solution is to cancel a credit card with a high interest rate.  However, before you call up your issuer and request to cancel, weigh the pros and cons first.  If you’ve had that credit card for a long time, closing the account now would mean erasing the oldest parts of your credit history.  Hence, such a move can negatively damage your credit score.  Instead of cancelling a credit card, use it occasionally for small purchases and pay off your full balance right away.

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About the Author

Shelly Evans is a freelance writer and loan consultant. She specialize in providing Bad Credit Resources for those who are in need.

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