Handling credit cards is can be difficult unless you have a plan.  With some planning and preparation, you can be on top of your credit card and finances. For many college graduates, getting out of credit card debt is your first goal.

Handle your credit card responsibly

If you want to have some leverage when negotiating with credit cards, start building a reputation. Keep a list of all of your credit cards, the current balances and credit limits on each, the current interest rate and how long that rate would last (if it were a promotional rate).

• Pay your bills on time. Having a good credit history can help when you’re looking to buy a home as a higher credit score leads to lower interest rates. I automated my bill payments to prevent myself from losing paperwork. It has saved me on late fees. This is important because credit cards charge $39 for late fees and another$39 for being over the limit. Many banks and credit unions have online bill pay as a feature.
• If you can, pay the full amount owed. Credit card companies might call you a “deadbeat“, but at least you’re not tied to them each month. Remember, you’re dealing with actual money that has to be paid back. 
• If you can’t afford it, then pay as much as you can. Put away the card; you’re in debt. Be aware, people tend to spend more with credit cards than cash. Try a debt snowball or even snowflaking. Find money in your budget to eliminate your debt.
• Don’t lend your credit card or account number to anyone! This applies even if it is a trusted family member or family. If something should happen to the account, YOU will be held responsible.

If you can't control impulse buys, then you may want to cut up your cards as you pay them off.

Set up a payment plan with your credit card company

When you speak with your credit card company’s customer service representative remeber to be polite and firm. You’re trying to get them to give a better deal; being rude will not accomplish that.

• If you’re unable to pay the minimum for your credit cards, call them to set up an affordable plan. With the recession, some companies are willing to work with you to get a monthly credit card payments that you can afford.
• At the very least, ask them to waive fees and lower your interest rate. Again, some credit card companies are more willingly to work with you as the economy has hit many families hard. They would rather get some money than no money.
• Get your payment plan in writing to protect yourself. It will only add to your headaches if they go back and say they never agreed to the monthly payment plan.

Last Resort: Balance Transfer Your Debt to Reduce Interest

If they are unwillingly to work with you and bills are mounting, consider transferring to another card with 0% interest. After transferring the balance, dump as much as you can into the credit card bill to lower the balance. Be careful though, as some cards have a fee with transfers.

This is a last resort solution, as it’s not getting to the root of the problem, but merely keeping your head above water.

Your Take on Handling Credit Cards

What do you personally do to keep credit card debt at bay? How many credit cards do you use?

Photo Credit: SqueakyMarmot

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