Credit Card Stack

Credit cards, while known to provide convenience to most of its users in making purchases, can also put cardholders deeply into debt.  Many financial experts suggest ways on how to control the use of credit cards to eliminate the chances of the credit card user to accumulate too much debt.  Here are some good ways any credit card holder can control the use of their credit cards.

First, sort your cards according to the interest rate, minimum balance, and minimum payment, among others.  After this sort them in a way where the card with the largest interest rate is on the top, while the smallest is at the bottom.  This would serve you well in determining which card you should use more frequently, having the lowest interest rate.

Try to pay more than the minimum amount required on the credit card balance.  We always think that it’s okay to pay the minimum amount, but in reality paying the minimum account means we pay off interest charges and a small amount - if any, goes towards paying down the principle balance. This also means the credit card holder is paying too much for the purchases he or she made.  If you can’t pay the entire balance, pay more than the minimum amount required. Pay as much as you can on purchases monthly, if you have other necessary bills, then cut out what you can to make larger payments on your credit card.

In case you can’t pay more than the minimum amount required, then pay the bill that has the lowest interest terms.  Prioritize credit cards with lower interest rates, and then pay off the bill of credit cards with higher interests.  Then take the minimum amount allotted including the minimum amount required for the next highest interest card and additional disposable money you have and pay this to the credit card with the second highest interest rate.  Repeat the process until all your cards have been paid.

You can also use a home equity loan for payment to your credit card debt, that is of course you have a home and your home has equity available.  This actually makes sense since interest rates for a home equity loan is lower compared to interests of credit card companies, plus they are tax deductible.

Alternatively you may also opt to transfer your balance to credit cards offering lower interest rates. A long shot is to request your credit card company to give you reduced interests, although it is quite unlikely that they will give in. Remember though that discipline is needed to eliminate or reduce your personal debt.

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