How To Manage Credit Card Debt

ADVERTISING DISCLOSURE

ADVERTISING DISCLOSURE:
Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com receives compensation from most credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. Credit-Land.com has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » Research » Guides » Building Credit History » How To Manage Credit Card Debt

How To Manage Credit Card Debt


Updated: December 26, 2012

If you are one of the many Americans who find themselves drowning in credit card debt these days, the following are a few suggestions of the best approaches to take while paying it down. Meeting the Minimum is Not Enough Bad habits are hard to break, and cultivating the habit of just making the minimum payment on your outstanding credit card balance each month is one of the worst financial moves you can make. Minimum payments usually amount to a meager 2 to 3% of the entire outstanding balance so paying that amount only will result you in paying for a longer period of time and shelling out more money overall as interest accrues. Avalanche! One very effective way of paying down credit cards debt that spans multiple cards is by employing a tactic known as “avalanching.” This is how it works – organize your cards from the one with the highest APR to the one with the lowest APR. Don’t get caught up worrying about the balance on each, just focus on their interest rates. Make the monthly minimum payments (on time!) to all of them except for the one with the highest APR, for that card make the minimum monthly payment plus whatever else you can possibly manage to tack on until that card in completely paid off. Then move on to aggressively paying down whichever card has the next-highest  APR while maintaining minimum monthly payments on the others until you have paid down all of your outstanding credit card debt. Talk Terms With Your Creditors If you are seriously financially strapped and can’t handle making even minimum monthly payments at the moment, call your creditors ASAP and let them know your situation. Call them before you simply stop paying, they will be a lot more likely to be willing to negotiate different payment terms if you have not yet defaulted on your loans. Request a new and lower repayment schedule, ask them to reduce your interest rate and, if need be, appeal to their desire to be repaid. Drop the “bankruptcy” bomb if you think it will make a difference, as in hinting that you may find yourself with no choice but to declare it unless you rearrange your financial house a little. In almost all cases creditors will do whatever they can to protect themselves from having to take a total loss.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
Add to Favorites:
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.

Related Research:

Top 5 Cards for Travel from Our Partners Winter 2017/18 – Expert Choice

Top 5 Cards for Travel from Our Partners Winter 2017/18 – Expert Choice

Posted: December 8, 2017

Nights are drawing out, the wind is colder every day and you already feel the lightest breath of winter on your face - autumn is here. Holidays are over, kids are back to school and all you are left with are hefty holiday bills that you ... Continue reading
Cash Back or Travel Rewards? Here’s How to Decide On The Right Card

Cash Back or Travel Rewards? Here’s How to Decide On The Right Card

Posted: December 1, 2017

If you're trying to find the perfect rewards credit card, you might feel like you're drowning in options. There are just so many out there, and many of them look similar. This can make it tough to decide on a card. One thing people often ... Continue reading
Credit Card Tips For Holiday Shopping 2017

Credit Card Tips For Holiday Shopping 2017

Posted: November 27, 2017

November and December are the busiest months as gift shopping reaches its peak. People rush around looking for the best gifts and the best deals leaving a lot of money in the shops. Holiday season may force you to go over the household ... Continue reading