What are some tips to manage credit card debt?

Credit card debt can feel overwhelming at times, but there are many ways to get the debt under control. From cutting up credit cards to prevent any further spending to a popular debt pay off method known as the snowball method there are many excellent ways to get control of debt.

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After using the credit card chaser to find the perfect card, it is important to not let your spending get out of control. If you find yourself already in this situation, sites like Suze Orman’s are an excellent resource for debt management tips. You can also learn more about making wiser financial decisions through magazines such as SmartMoney.

What are some basic steps to paying off credit card debt?

The first thing someone in debt should do is cut up their credit cards. Once they start paying down their debt and there is an available line of credit again the cardholder might be too tempted and begin spending again. Destroying the cards helps to get rid of this temptation.

If the cardholder likes to shop online, it would be a good idea for them to check their favorite shopping sites and make sure they have not saved their credit card information to their accounts. In addition, if their computer has an auto fill feature, they should double check that their credit card information is not saved there as well.

Once the cards themselves have been taken care of, it’s time for the hardest part, taking an honest look at the debt. The cardholder should collect all of their credit card bills and look at how much they owe on each one and decide which balance to start paying off first.

Some people might think they should pay each bill equally, but this will most likely cause the cardholder to only be able to make minimum payments on each card and that will not get the debt paid quickly. By paying only the minimum balance it will take the cardholder years to pay back their debt because of the interest added each month.

The cardholder should focus on paying off the credit card with the highest interest rate first by paying more on that card each month and only pay a little over the minimum balance on the others. They should also call their credit card provider to renegotiate their interest rates. Most card companies are willing to work with their cardholders if they know they are struggling with debt.

How can balance transfers help me pay of my credit card debt?

If the credit card provider is unwilling to lower the interest rate and the cardholder still has a good enough credit score to get approved for a new credit card they should try to find one with a special zero percent introductory interest rate. Many new cards today offer this type of introductory offer. Most no interest introductory offers last six months to one year so the cardholder should make sure they absolutely know how long period lasts.

Once the cardholder gets their new no interest credit card, they should transfer the balance from their high interest card to the new one. The goal is to pay down as much debt as possible during the no interest period.

Some people think that since they will not be charged interest for a while that they do not have to pay as much each month as they were with the high interest card, but this is not true. To take advantage of the no interest period and really put a dent in the debt, the cardholder should pay the same amount, if not more on the no interest card as they were on the high interest card.

What is the snowball method used to pay off debt?

There is a very popular debt payment method known as the snowball method popularized by saving guru Dave Ramsay. This is a great choice for someone that has multiple credit cards to pay off.

With this method, the cardholder pays off their cards by choosing the smallest balance first and going in order saving the highest balance for last. By focusing on one card at a time, the cardholder will not get overwhelmed.

They should look at the minimum payment due on the smallest balance and decide how much more each month they can contribute to this balance. Doubling the minimum payment is the best choice, if they can pay more than double then they should.

So the cardholder pays over the minimum balance on the card with the lowest balance while just paying the minimum amount on the other cards. This will pay off the first card very quickly. Once that card is paid off they take how much they were paying each month for the first card and apply that to the minimum balance of the second card.

The cardholder continues this process until all of the cards are paid off. This method will save the cardholder thousands in interest payments.

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