The best way to avoid bad debt is to plan your expenses, set a definite budget, and stick in your limit. But imagine if you find yourself stuck in credit card debt right after the holidays? What would you do in order to get yourself out from the situation? On this post, we present strategies for cardholders regarding how to manage debt:

1. Check your accounts. Make sure that there aren’t any incorrect charges in almost any of your accounts, especially if you have balances on multiple credit cards. In case you notice errors, call up your credit card issuer immediately to dispute the costs. This way, you can be certain that you are not paying off debts you didn't owe.

2. Prioritize your financial situation. If you will be working with multiple personal debts, see which of your respective accounts have the highest rate. When possible, pay off your full balance from this account to stop debt from further accumulating. Be sure to submit the minimum due payment within the credit cards that you can’t pay entirely to avoid extra fees. Afterwards, you are able to work with paying off the money you owe from one card to the next.

3. Consolidate personal credit card debt. Another approach is to transfer balances through your high rate credit cards to some card which has a low rate. Using this method, you may avoid expensive APR charges when you work with debt repayment. You may also have a credit card with zero balance transfer rate. However, just before you do, there are certain things you should think about.

Ensure that you will have sufficient time to totally pay down each of the balances you transferred. How long with zero rate of interest last? How much will the standard rate be once the promotion offer ends? How much is the account balance transfer fee? Furthermore, be careful that you do not max out or exceed your limit simply because this can badly pull down your credit score.

4. Minimize your spending. You are able to pay the balance of your credit card debt faster if you possibly could cut back on your monthly expenses. Find ways to minimize your costs so you're able to prioritize on debt repayment.

5. Stop incurring new debts. Don’t use one of your credit cards for brand new purchases. If you’re done paying a balance in one card, be sure that you do not incur new charges for this account. Some people even place their credit cards within the freezer to literally freeze them and discourage them from spending.

6. Don’t cancel old cards. Some people might think that the solution may be to cancel a credit card that has a high APR. However, before you decide to get in touch with your issuer and request to cancel, weigh the pros and cons first. If you’ve had that credit card for a long time, closing the account now will mean erasing the oldest portions of your credit report. Hence, this kind of move can negatively damage your credit score. Instead of cancelling a credit card, use it occasionally for small purchases and pay the balance of your full balance in a timely manner.