How to Fix your Credit Card Problems in 5 Steps

It can be hard to know where to start with paying on your credit cards. With tuition, rent, and food on your mind, you may have skip on paying your card. That will hurt you now and in the future. Here’s five steps on paying off your credit card debt.

1. Get your current balance on all your credit cards. If you’ve been tucking away the bills as they come in, you may be in for a huge surprise. Many credit cards charge $39 for late fees and another$39 for being over the limit.

2. Write down the balance the due date, and the interest rate of all the credit cards. Write the highest interest rates first and continue in descending order.

3. Go ahead and call all your credit cards and ask for a lower rate. See if you can get a lower rate, even if it’s only 1%. The goal is to reduce your debt and make your payments go further.

4. Examine if you can switch the balance over to a 0% interest card for a few months. Sometimes you can do a balance transfer. Dump as much as you can into the credit card bill to lower the balance. Watch out, though, for balance transfer fees or any other switching costs. This may actually turn out to be worse than stay at your old card.

5. Pay as much as you can on the highest interest card. Part of the debt snowball method is to pay the most on the highest interest card and pay the minimum on the others. When you pay off the first card, put all the debt payments from it into the second card and pay minimum on the others. Continue until you pay off the cards.

JD from Get Rich Slowly has more articles explaining debt snowballs. His approach is to pay your lowest balance first as a way to build mental momentum towards your goals.Trent from The Simple Dollar has a variation called the scared straight debt snowball. He also compares Suze Orman and David Ramsey’s methods of eliminating debt.

If you liked this article, sign up to receive updates automatically through email.

The Consumerist

• Reward Credit Cards Photo Credit: liewcf Last Updated: Novembe 13, 2008 Wow, it seems that Discover has cards that are good for balance transfers and rewards.   If you decide to use these, use them wisely. I looked up credit cards with no annual fees to help you. Some people can pay off their......
• Watch Your Credit Cards /caption] Credit card (and other) debts can grow like weeds. Try to tame the it before debt gets out of control. Fixing one habit at a time works, trust me. If you use credit cards or have credit card debt, you have to be diligent with handling them. I've learned quite......

• More Protection now offered through New Credit Card Regulations New Credit Card regulations have been signed into place by Barack Obama in May of 2009, however most of the regulations won't come into play until February 22, 2010. These  regulations will ensure a clearer understanding of when payments are due, adhering to less stressful credit card payment. On Thursday,......
• The Start Digging Out Of Credit Card Debt Challenge - Week Two. Last week your homework was a very simple task; gather up all your cards, write down the name, balance, interest rate and credit limit of each card. I am guessing you were able to complete this task in an hour or so, but I gave you all week because that......