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Managing Credit Card Debt

By: Nicole
Monday, July 30, 2012
Managing Credit Card Debt

Credit Card Debt can be very stressful; it puts so much more pressure on literally every area of one's life. Being wise and knowledgeable about every area of your finances is extremely important to keep on top of them. The fine print on some cards may be hard to understand, and when you sign up for a card, especially if you are a new customer, then you may find you are having more hassles than you expected.

  • Make the payment of your credit card debt a priority. Without this basic first step, you will likely find it only too easy to keep running from the situation or accumulate more debt. Unless you address your debt head-on, it will continue to eat away at your budget.

  • Pay your debt on time or interest charges will be added unto the total, creating a larger minimum payment for the next month, and an overall increase in your total payment. Also, if you have more than one credit card debt, focus on paying off the highest rate card first.

  • It is as simple as it sounds. Do not go over the authorized limit on your card. In addition to penalties, this will attract an 'over-the-limit' fee.

  • Because credit cards are unsecured loans, credit card companies tend to be willing to negotiate the interest rate or other aspects of your credit agreement. When you explain that your intent is to get your debt paid, most creditors are willing to listen and work with you. When you call, have your household budget and latest credit card statement from that company handy.

  • Say for example another company has offered to pay off all your old credit card debt at nine percent if you switch. Call your old company and tell them the deal you've been offered; ask if they can do better, and go with whichever is lowest.

  • By so doing you will avoid the hangover when the holiday is over and reality hits.

  • Do not draw cash advances on your credit card. Setting up a personal line of credit is much more cost- effective because interest is charged on cash advances from the day of the advance and cash advances have no future financial value to you.

  • Be aware of the interest rates as well as the pay cycle of your card. If you pay before a certain date and pay all the balance on your bill, you will avoid interest all together. Also take advantage of promotions that offers reduced interest rates on repayments etc. Interest rates vary between banks from a high of 49% per annum to a low of 9%, shop around and seek out the lowest interest rate available.

  • These will vary between banks and also for card company (ie. MasterCard, Visa etc.), some banks offer cards with no annual fees while others may be as high as $100 USD. It is important that you know your annual fee and then make an informed decision on which bank you take a credit card from.

  • First, gather your financial records, bank statements, utility bills, etc. Then, list your total monthly income followed by your total monthly expenditures, such as a car payment and mortgage. This way, you will have concrete numbers to work with in regard to your credit card debt. This will be useful if you have a limited budget each month.

First Aid Financials remains committed to changing the lives of everyone we come in contact with and we will work tirelessly to keep you financially focused. We strive for continuous improvement service we provide and the products we offer.

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