Credit Card Attack Plan

Sometimes credit cards can be your worst enemy. They’re great when you use them responsibly, but everyone makes mistakes, and if you max out a card, that mistake can be hard to navigate. If you have a maxed-out card, take the following steps to remedy it.

Don’t Use Other Cards

It might be tempting to use another credit card now that one is maxed out. However, try your best to avoid that. A maxed-out credit card not only carries heaps of debt, it also damages your credit score. The last thing you want to do is add more debt to this situation.

Revise Your Budget

The first thing to do when you have a maxed-out credit card is to revise your budget. Look at your budget in terms of needs and wants. Needs are things like food, shelter, and transportation. Wants are things that you can probably do without, like new shoes or a new computer. Cut back on the “wants” category and prepare to use that money to pay down your debt. Keep in mind that this isn’t a permanent thing. Once you dig out of debt, you can add those “wants” back.

Figure out a Plan

Now that you have some money freed up, it’s time to figure out how you are going to pay down the credit card debt. Think things through and pick a strategy that you will stick with. Here are a few options:

• Balance Transfer Card. If you qualify for a balance transfer card, it might be a good option. You want a card with a 0% interest offer for at least 12 months. This will allow you to pay down the debt without being saddled by interest.

• Avalanche Method. Make a list of your debts with the highest APR to the lowest APR. Pay down the highest first, then work your way down.

• Snowball Method. With the snowball method, you pay down the smallest debt first, then work your way up to the largest. This strategy’s strength is in the motivation you get from seeing progress.