Credit Card Debt Management

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  • Limit your spending
  • Make your payments on time
  • Pay more than the monthly minimum payment

Credit Card Debt Management

The Three Golden Rules of Credit Card Debt Management

When you have a credit card, you have a potentially lethal weapon - lethal for your finances at least. It is very easy to get in serious debt through overuse and abuse of credit cards. All it takes is a few missed payments or getting into the bad habit of only paying the minimum monthly payment and before you know it you're in debt. However just because you have a credit card doesn't mean you will inevitably end up in debt. You just need to have proper credit card debt management.

Managing your credit card debt properly involves three rules:

  1. Limit your spending
  2. Make monthly payments on-time
  3. Pay more than the monthly minimum payment

Too many credit card owners neglect all three of these rules. They over use their credit cards, miss payments, and only pay the minimum amount required each month. This is the easiest way get in trouble with your credit cards. Proper credit card debt management takes discipline and dedication. You need to constantly be on top of your charges and payments if you want to keep them under control. Credit cards are a great way to increase your credit rating, but also a very easy way to send your credit score plummeting.

How to Incorporate the Three Golden Rules of Credit Card Debt Management into Your Life
It's actually quite simple to put into practice the rules of proper credit card debt management. Again, it does take dedication and discipline, but the end result is definitely worth it. Here's a detailed look at each rule and how to start following them.

Limit Your Spending - the best way to limit your spending is to pay cash for as much as you can. Only use your credit card when you absolutely have to. This might require establishing a household budget so you don't spend all your cash on unnecessary items and end up using your credit card(s) after all. For details on how to establish a personal expense budget, check out the Free Personal Household Budget Guide.

Make Your Payments On-time - many of us make late payments on all our bills. This is not a good practice to have, especially for credit cards. With every late payment there are late fees and even the possibility of negatively affecting your credit score. So if you want to have proper credit card debt management, you need to pay your credit card bill on-time each month. The best way to get into this habit is to establish a date each month where you sit down and pay ALL your bills. If your bills are due during various times of the month, you might need to establish two separate dates or at least create a calendar where you write down when each bill is due and when you need to send the check/make the payment by. This will help create reminders for you so that you don't end up forgetting to pay your credit card payment.

Pay MORE than the Monthly Minimum Payment - when finances are tight, this is a habit that many of us fall into. However, this habit can quickly get you into trouble. You need to pay a significant amount of your credit card debt each month, preferably all of it. It is OK to leave a small amount unpaid as long as you make your payments on-time and are paying more than the minimum each month. The more you can pay each month, the quicker you can pay off your debt. The best way to get into this practice is to remind yourself that with each dollar you leave unpaid, the credit card company is CHARGING YOU interest. The more you leave unpaid, the more interest you'll be charged. Paying only the minimum amount required each month won't balance the interest charges enough for you to make a serious dent in your credit card debt. So, make some financial cut backs in your monthly budget and start paying as much as you can each month.

Proper credit card debt management is something every credit card holder should have. It's the best way to keep your finances under control and avoid falling into the downward spiral of credit card debt. There are ways to pay off credit card debt if you've found yourself in too deep, but the best way to avoid such a situation is to prevent it from happening in the first place. Credit card debt management is the best way to make sure it doesn't.


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  • JH
    Jan, 2011
    You can move your debt to a credit card with a lower APR...