Tips on credit card debt management

Credit cards are prevalent in modern life. If you have large credit card debts, one of the least effective ways is to pay one credit card by using another. Instead, follow the advice below to help you manage your credit card debts more successfully.

Credit Card Debt Management - Steps To Take

Make a list of your debts and your creditors including the total amount owed to each Prioritise your debts according to amount and urgency. Pay particular attention to debts you may need to repay at once based on the creditors threats to take legal action against you. Other types of debts which you should consider a priority include your mortgage or rent, council tax and income tax.

Lastly, list the debts which are non-priority debts outstanding loans including money borrowed from friends and family. However, be aware that you can be taken to court for non payment of non-priority debts.

Once you have listed and prioritised all your debts, start working out a budget to help clear your credit card debts. It is important to set a realistic budget, if the budget is unachievable, your good intentions will quickly disappear.

Once you have set your budget and considered how much you can afford to repay, make sure you stick to this amount religiously until the debt is completely cleared.

If possible, reduce your monthly expenditure by budgeting tightly on household expenditure such as food, fuel and entertainment. It may even be worth thinking about ways to earn more money by finding a part-time temporary job.

You will be viewed more favourably by credit card companies if you are open and honest and approach them for help and advice. Many of them will be happy to negotiate with you to come up with a mutually agreeable repayment plan. If you can afford it, it is a good idea to pay them a lump sum just to show that you are committed to repaying them. Do not be afraid to make your creditors an offer - you will be surprised how well this could work out for you in the long run.

Alternatively, you can use the services of a reputable and professional debt management company to help you manage your credit card debts. These companies will probably consolidate all your credit card debts into one large debt. They will then calculate an affordable amount that you can repay. Using a debt management company will help you obtain the support and advice you need in a stressful situation.

You can also try to manage your credit card debts by entering an Individual Voluntary Arrangement or IVA with your credit card company.

It is also possible to choose loan consolidation. This is where you consolidate all your credit card debts under one loan so that it is easier to handle.

As a last resort, if you are really unable to repay your credit card debts, you may apply for an Administration Order which will permit you to pay only a portion of what you owe. If all fails, you will need to declare yourself bankrupt.