Managing credit card debts

Credit cards can be a blessing or a curse. Used correctly, they are an excellent short-term source of finance, particularly useful for emergencies, and they are a good way of improving your credit rating, since they can prove your ability to handle credit reliably. But if credit card debts are left for too long, those debts can begin to grow, and it’s often not long before they become unmanageable.

Managing credit card debts is very important for this reason. In particular, people with a number of credit card debts need to be extra careful, as it can be difficult to keep on top of all of them, and the potential damage to your credit history if you struggle with repayments is increased.

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Quick guide to managing credit card debts

Keep it simple.

The fewer cards, the better. You’ll only have to look at one statement each month to see how much debt you have left to repay, and you’ll only have to make one payment each month.

If it comes to the worst and you miss a payment, it also means only one mark on your credit history, instead of many.

Try to pay more than the minimum payments.

Or if possible, try to clear your credit card debts entirely at the end of each month. Credit card providers will charge you interest on any outstanding balance you have at the end of the month, so by paying everything at once you are effectively using your credit card for free. Plus, the longer you have outstanding debts, the more interest you will pay overall.

Even if you’re struggling with a large credit card debt, or a number of cards, it’s essential that you pay at least the minimum fee each month. Failure to do so could result in legal action from your provider, charges being added to your balance and a negative mark on your credit history.

What if managing credit card debts becomes too difficult?

If managing credit card debts on your own becomes a seemingly impossible task, it may be time to consider another debt solution. There are a number of suitable debt solutions available:

Debt consolidation

Debt consolidation is particularly useful for managing credit card debts. It can simplify your finances by turning your existing debts into one convenient monthly payment. Your interest rates will often be lower than your credit cards, since credit cards typically carry a high APR, although paying debts over a longer period may increase the total amount to be paid in the long run.

Debt management plan

Debt management plans are also an effective way of managing credit card debts. They are often more flexible than other methods, since your payments can change based on a review of your circumstances every few months – but they may leave you with very little disposable income, as payments are meant to reflect how much you can afford each month.

IVA (Individual Voluntary Arrangement)

An IVA is typically for debts of over £15,000, and is usually considered an alternative to bankruptcy. An IVA lasts for five years, after which any outstanding debt is considered settled, and payments are based on what you can afford.

If your credit card debts come to this amount and you can’t see yourself being able to repay the full amount, an IVA could be your way out of debt. However, be aware that an IVA will seriously damage your ability to obtain credit in the future.

Try our debt solution finder

Answer a few simple questions and find out which debt solutions could help you, based on your circumstances.

Your Situation

Your total debt: Please select... £2,000 to £7,000 £7,000 to £12,000 £12,000 to £19,000 £20,000 +

Your location: Please select... England Wales Scotland Northern Ireland

Employment status: Please select... Employed full time Employed part time Self employed Unemployed Retired Student

Your email: (optional)

Your Details

First name: Surname: Telephone 1:

Telephone 2: (optional)

I agree to the privacy policy:

Please remember, this is just an information tool. We would always recommend you speak to a debt advisor for the most appropriate way to resolve your debt problems.

We'll give you an on-screen recommendation and call you. One of our advisors will be in touch to answer any questions you may have about your results.

Your privacy is important to us. All correspondence is held in the strictest confidence and we will only request information required to find your debt solution.

Tags: credit, credit card, credit card debts, debts, debt

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