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Having Trouble Keeping Up with Your Multiple Credit Cards? Learn Which Ones to Pay off First

Published February 28, 2014

Did you know that the average American household has at least 15,000 in credit card debt? Because most Americans own more than one credit card, keeping tabs on them all can be difficult. There are plenty of legitimate reasons why people may face high credit card bills, and it’s important to remain positive in the face of this potentially overwhelming challenge.

Multiple Credit Cards

Having multiple credit cards isn’t unusual. You might use one credit card for emergency purchases, another for trips to the grocery store and yet another for discretionary purchases. With each new account, however, it becomes more difficult to track and manage your bills. Eventually, you could wind up with large, high-interest balances that seem overwhelming.
That’s why we’ve come up with a three-step plan to help you determine which cards to pay off first.

1. Evaluate Your Interest Rates

If you’ve become burdened by your numerous credit cards and their numerous debts, don’t panic. Instead, start by evaluating the interest rate on each of your credit card bills. Since high-interest balances grow at a faster rate than low-interest balances, it’s usually a good idea to pay these off first. However, cards that have begun to accumulate penalty interest require particularly urgent action and should take priority over all others.

2. Look at Your Balances

A good rule of thumb is to pay off the cards with larger balances before moving onto cards with more manageable debts. If you can devote a little more money each month to your cards with the highest interest rates, you’ll help get your big debts out of the way first and make way for the smaller cards. However, make an effort not to skip paying one card for another. Instead, aim to allocate more of your monthly spends to paying off the ones with higher interest rates. After all, large balances accumulate more interest than small balances.

3. Get Help from a Credit Counselor

Keeping on top of your debts can be hard, but you don’t have to tackle your credit card bills on your own. A credit counseling program can help you manage your debts and begin paying down your obligations in a controlled manner. Over time, you’ll be able to open up some breathing room in your budget.

Lower Interest Rates, Consolidated Payments

With a proper debt management plan, you’ll be able to lower the interest rates on some of your credit card bills. This makes it easier to determine which ones to pay off first and reduces the total amount of your budget that needs to be devoted to interest payments. At the same time, your credit counselor will consolidate your balances into a single monthly payment that’s easier to manage.

Although living with loads of credit card debt isn’t easy, help is available. For more information on how CreditGUARD can help lower your interest rates and put an end to annoying creditor calls, visit our debt solutions page.

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