How to Manage Your Credit Card Debt

Any debt reduction plan has to have a good management strategy. These days with the internet and online banking it has never been easier to manage your credit card debt. This is because you have practically direct access to every aspect of your account via the internet. If you are applying for a credit card and the company does not have a way to view and pay your account online then you need to find another card because the old way via the mail is just too inefficient especially if you have a lot of high balances on your cards to manage.

But online access to your credit card is only one aspect of managing your credit card debt. Here are some other pointers: First of all, try to avoid altogether doing credit card cash advances. Many if not most credit cards allow cash withdrawals from ATM machines and while it might seem like a way to get quick cash, it is a way to get into trouble very fast. Cash advances carry higher interest rates as opposed to purchases and begin accumulating right away from the moment of the advance.

It's easy to use a credit card and that is why many are in trouble with them. So you should use them for the big purchases. Don't use them for the little things like a dessert at a coffee shop. Try to avoid that because what seems line a small purchase at the time will accumulate after many of them are accumulated. Sometimes, a credit card will offer a promotion of 0% interest for 6 months on balance transfers from other cards.

What they do is send you some special checks in the mail that you use to pay towards the other high interest cards and that balance will then move to the card with the promotional rate. While this looks great and it can be advantageous, make sure you read the small print on the terms and conditions. They offer this promotional rate as long as you make the payments on time. In most cases if you are just one day late, the promotional rate is null and void.

Also, any payments you make on to a credit card with balances at promotional rates, those balances will get paid first. In some cases, the payment is applied to the promotional rate of the outstanding balance yet the remainder of the balance is not touched and accumulates interest at its current interest rate. In the end you might find that the balance transfer had little overall affect. The key to paying down any credit card debt is to make payments beyond the minimum payment.

In fact you might be surprised at what paying maybe $40 to $60 over the minimum payment will do to decrease the outstanding balance on a card. If you have even a little talent setting up Excel spreadsheets you can set up one to give you a "what if" projection on your credit cards. By just taking what you pay, subtracting it from the balance and then applying the next cycle's interest you get a close approximation of how the principle actual went down as a result of a payment.

If you set up this same formula for a series of months you can see what the end result would be after say a year. By playing around with the proposed payments you can work on figuring your target payment. So then technology today is great for managing your credit card debt and it is definitely to your advantage to use it.

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