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sara

Are you being constantly harassed by your creditors because of your credit card debts? If so, then you should note that it's possible for everyone to manage and control such debts provided we put in our sincere efforts.

Check out the following tips to manage your credit card debts:

Handle your creditors smartly: Don't run away from your creditors as it would make the situation worse. If you receive a call from your creditors, let them know about your financial crisis and inform them that you want to get out of this debt trap. If they know that you want to sort out the issues, they may come up with a repayment plan. This will in turn help you paying off your debts in a affordable way.

Set a budget: In the beginning of the month, make a budget and try to stick to it. Try and keep a tab on every dollar that you spend (I know it's difficult but you can always try, isn't it?). Once you make this a habit, you would be able to save money and use it to lower your credit card debts. Thus, it would slowly help you in getting rid of those debts.

Pay off the dues on time: If you pay off the dues on time, you will not be charged any late fees. Thus, you won't have to pay anything extra to your creditor. You can set up automatic payment plans in order to avoid the late payments.

Niicss · Posted: Tue Nov 10, 2009 3:53 am Post subject:

Hey Sara,

These are the two tips to manage credit card debts from my end:

Emergency fund: Build up an emergency fund which will help you in dealing with emergencies in a better way. These emergency funds are quite handy during illness, unemployment or a sudden car repair. You can deposit a small portion of your salary in this emergency fund – may be $500. It you do it for a year then, well, you would save $6000. Isn't that great ? If you do not have any immediate emergency, use it to pay off a portion of your credit card debts.

Professional help: If you are unable to handle your credit card debts on your own, you can take the help of debt settlement companies. They will negotiate with your creditors and get your debts reduced by around 40%-60%. Also, you won't have to handle the nasty calls of your creditors. The debt settlement company would take care of it.

Posted: Wed Nov 11, 2009 3:15 am Post subject:

Christmas is knocking at the door. I feel this year Christmas would be one of the toughest as many people are facing the after effects of recession. Job loss and pay cuts have made life tougher for most of us. So, I would suggest some tips which may help you manage your Christmas credit card debts:

Tighten your family budget for the time being.
Decide the amount of money you would spend on each of the presents.
Check out the prices online before you go to the shopping mall.
Use one credit card to buy all your Christmas gifts.
Visit shops offering discounts to buy your Christmas presents.

gmakerley · Posted: Wed Nov 11, 2009 3:31 pm Post subject:

well, guest, i think it might be wiser to pay cash than to use "one credit card." but it's not a terrible idea that you proposed...just not the best.

riseabove · Joined: 09 Nov 2009 Posts: 277 11.01 Dollars($)

the emergnecy fund idea is a good one.

I've also taken to looking carefully at how I use my credit card. As part of my budget i look at what I spend money on regulalry, things like groceries, travel costs and bills.

The day to day stuff that I want to use my credit card for, I set a weekly budget for and every time I get paid, that money goes immediately onto my credit card Likewise money is put aside for bills such as insurance and utilities in a spearate account.

When I pay those by credit card, I immediate transfer the money from my bills account straight onto my c. card.

I can proudly say that I haven't paid a cent in credit card interest for years now (though there are some annual fees that are unavoidable, but they are very little), and at the same time I accumulate rewards point on my card which can be redeemed for cash

Used in this way, my credit card actaully saves me a couple of hundred dollars a year.

Samantha

One way of managing your credit cards wisely is to use the Snowflake method of paying down your debt. This is where you make micro-payments whenever possible and reduce your outstanding balance. Micro-payments are just extra payments you make towards your credit card debt. The extra money can come from additional dollars you've earned from your job or windfalls such as the tax rebate or Stimulus payment you've received from the IRS.

gmakerley · Posted: Mon Nov 16, 2009 10:10 pm Post subject:

another good notion, samantha. in this day of internet banking, doing that is much easier than it might have been in the past. and as long as you get your minimum monthly payment, or more, in by the due date, you're building a solid credit reputation as well as reducing interest costs.

adonis · Posted: Mon Nov 16, 2009 10:40 pm Post subject:

Pay cash, if possible: It's not mandatory to use credit card always. You can go for the traditional way and pay cash for your purchases. We all know that use of card leads to interest rates which are just an added expense for us.

Debit cards: Getting a debit card can be quite useful if you want to manage your credit card debts. If you use a debit card, you're actually paying for the purchase of the goods with your own money. Thus, you're not incurring any further debt.

smithsussane · Posted: Tue Nov 17, 2009 1:21 am Post subject:

These are two tips from my end which may help in reducing/managing credit card debts:

Pay the credit card bill in full:
Try to pay off your balance when the monthly bill arrives. If you pay only the minimum amount, there would be added charges and interest rate that you'll have to pay. Thus, your credit card debts would keep on increasing. Paying off the credit card bill in full would help you in long run to remain debt free.

Pay off credit cards in order of priority:
It's always sensible to pay off your credit cards with the highest interest rates quicker. Suppose you've 2 cards, with the same balance but different interest rates - 15% and 20%, then it makes sense to pay more off the 20% card. Thus, you'll find that your overall interest payment is reduced to a large extent.

gmakerley · Posted: Tue Nov 17, 2009 9:05 pm Post subject:

some good points, but beware of making purchases of major items with debit cards. debit cards generally lack the protection that credit cards afford people. if you're in doubt, check with the card issuer as to your rights, responsibilities, and liability in the event of faulty merchandise or service.

riseabove · Joined: 09 Nov 2009 Posts: 277 11.01 Dollars($)

using your credit card as a cheque account is fine as long as you have good control over your spending and actually keep an eye on it. too often however people are quick to rack up the bills and slow to pay them off.

general rule of thumb: If your credit card balance is higher this pay day than it was last payday, you're going the wrong way and need to change tack fast.

Samantha · Posted: Sat Nov 21, 2009 5:37 am Post subject: Debt Avalanche Method

I agree with Sussane. One can prepare a plan to get rid of the high interest cards one by one. This can be done by help of the Debt Avalanche Method. In this method, you make minimum payments towards all other accounts except the one with the highest interest rate. For this account, you'll be paying more than the minimum payment every month. This will help you to get rid of the highest interest account fast. Once this account gets paid off, you'll start making extra payments towards the one with the next high interest account. Carry on this process for each and every account till you're completely debt free.

I hope you find this method helpful. Smile

gmakerley · Posted: Sat Nov 21, 2009 12:37 pm Post subject:

a sensible approach, samantha.

banker0679 · Posted: Mon Feb 01, 2010 3:21 pm Post subject:

Remember that credit cards have a line that says High Balances on the credit report. High Balances can be a big factor on your credit report if your credit limit is about the same amount.

For example,
Limit 1000
High Balance 900

This means that you maxed out once on this card up to 90% of the limit

This is why i never recommend a person to max out their card in 1 day and paying it off the next day. Some creditors will report you even if you pay it off the next day. Always stay at least under 50% of your limit and/or under 35% is optimal.

aboutyourmortgageusa · Joined: 24 Dec 2009 Posts: 33 10.07 Dollars($)

most of us aren't born knowing how to use credit cards.... Still, it’s important to learn the rules of the CC game... if u want to do online purchases with ur CC then be careful about frauds it is better to have a credit card of very low Cr. limit so that min. damage id caused if misused. also remember not to default on the payment whatever the amount since this data is fed to a secret database and is made available or sold to banks and loan companies as your credit record and you may be denied a future loan based on this info... thank you Smile

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Easy-to-follow tips to manage credit cards