How to Get Ahead when You Are Behind on Your Credit Card Debt?

How to pay down credit card debt and keep from falling behind on payments.

Credit card debt with often high interest rates and late fees can appear overwhelming at times. Especially when you are struggling to make the payments on time while trying to pay off the debt. Even with new laws going into effect, high credit card balances can continue to grow if they aren't handled properly.

Stop making purchases on the credit card(s).

This is a big one. Every time you make a new purchase on a credit card that you carry a balance on you are simply adding to the balance that interest accumulates on.

Furthermore, many card issuers wipe out any grace periods on new purchases made when you carry a balance from month to month. This means interest may begin accumulating immediately on new purchases.

Move recurring bills that are charged to the card to a debit card or at least a credit card with the lowest interest rate.

Also try to eliminate some spending each month, even spending that doesn't occur on the credit card. This will free up a few extra dollars towards the debt.

Pay as much as you can each month.

Make sure you pay at least the minimum due each month on time to avoid late fees and dings to your credit score. But if your balance doesn't seem to be going down even as you pay the minimum, don't be surprised. Companies often apply the payment to the interest first.

Try to pay as much as you can over the minimum each and every payment, even if you can only manage a few dollars more. Coupled with not using the card for any purchases this can reduce the overall amount in interest you pay on the balance.

Call the credit card issuer.

If you can't make the minimum payments, call the issuer before you fall behind. They want to make their money back rather than losing all of your payments so they will work with you to set up a payment plan in many cases. They want to get at least some of their money back. But if you skip out on the payments, your interest rate may increase, you'll be assessed fees, and your credit score will go down.

Transfer balances.

If you have another credit card with a lower interest rate call that issuer and see if you can do a balance transfer. This issuer, if they agree, will pay off the other card and transfer the balance to their card.
Keep in mind you might be charged a transfer fee, the interest rate might change, and you'll want to make sure the available balance on the second card is more than enough to cover the balance from the first card. You don't have to transfer the entire balance in some cases.

To summarize: If you are falling behind or having trouble paying down credit card debt stop making new purchases on the cards. Apply as much extra money as you can to the balances each month, try to work with the card issuer, and try to look for lower interest rates if possible.