Reducing Credit Card Debt in 2016

Reducing Credit Card Debt in 2016

December 1, 2015         Written By John H. Oldshue

Christmas shopping will soon reach a frenzied pace, and millions of consumers will buy things they probably cannot afford. Many of us will enter January with credit card debt.

Issuers are adding to the dilemma. Mailboxes have been filled with credit card offers as issuers aggressively market lucrative rewards and balance transfer cards, especially to consumers with good or excellent credit scores.

Consumers need to stop running up large account balances and getting themselves in a financial pinch like they were in 2008. Here are ten tips for reducing credit card debt in 2016:

  1. Know how much you owe for all credit cards debts. Write down a debt summary that includes the creditor, monthly payment, interest, balance due, credit limit and due date for each loan.
  2. Contact your creditors to see if you can negotiate a lower interest rate. The less money you pay in interest, the more money you can use to pay off your credit card balance as well as other bills.
  3. Pay off the card with the highest APR first. Continue to pay the minimum on your other cards until you pay off the card with the highest rate. Then, focus your effort on the card with the next highest rate. After you pay off the card, keep it open, especially your oldest cards. Losing this available credit can lower your debt utilization ratio which could, in turn, lower your credit score.
  4. Pay more than your minimum payment. Your minimum payment is usually only 2%-5% of your balance. At this rate, it will take many years to pay off your debt. Start with the card with the highest interest rate and try to at least double your minimum payment.
  5. Balance transfer offers are currently very attractive so consider transferring your balance to a card with a lower rate, especially if you can get approved for a card like the Chase Slate, which has no balance transfer fee during the first 60 days of being a cardholder. If your rate is above 12%, look for a card that offers 0% for at least 12 months. To take full advantage of this 0% interest, pay as much as you can above the minimum payment each month.
  6. If you have a credit card balance, stop using that card for anything other than emergencies. Use cash instead. If you carry a balance, you are paying interest for every purchase, including clothing, entertainment or dinner. Factor that in to each purchase. Paying with cash will not only save money on interest, but it could also reduce the amount you spend.
  7. Pay your bills on time, every time. Not only do you have to pay a late fee, but late payments can also appear on credit reports. Negative information like this can result in lower credit scores and higher interest payments.
  8. Give yourself a realistic timetable to pay off this debt. It took time to accumulate this credit card debt, and it will probably take even more time to pay it off.
  9. If you are surprised by your current rates, check your credit report. It may contain an error that lowered your credit score, causing creditors to increase your rates. If you find an error on your report, contact the credit bureau to report it. They must respond to your claim in thirty days or remove the information that is incorrect or unverifiable. You can dispute by mail, telephone or online. If the corrected error results in a higher credit score, alert your creditors to this and ask for a lower interest rate.
  10. If you are in danger of missing a payment, or defaulting on your credit card loan, contact your credit card issuer as soon as possible. Your issuer may work out a payment plan with a lower rate or monthly payment if it will help keep your account out of default.

The information contained within this article was accurate as of December 1, 2015. For up-to-date
information on any of the terms, cards or offers mentioned above, visit the issuer's website.


About John H. Oldshue

John Oldshue is the creator of He worked for over 15 years in television and won an Emmy award for his reporting. He covers credit card rate issues for
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