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7 Tips for Smarter Credit Card Management

​​​Credit card debt hit a record-high in 2023, leaving many people carrying balances and struggling to become debt-free. However, there are ways to manage credit, such as changing spending habits or seeking professional support.

Use the debt avalanche method

When you have credit card debt, it’s crucial to pay at least the minimum amount due on each card each month. But if you have extra cash, you can use the debt avalanche method to pay off debt faster and cheaper.

How does the debt avalanche method work? With this method, you pay the minimum amount due on all of your debts each month but pay extra towards the account with the highest interest rate.

Once that account is paid off, you roll the freed-up funds toward your debt with the next highest interest rate, and you continue that pattern until all the accounts are paid off.

Follow a budget

The key to avoiding and reducing credit card debt is to spend less money than you earn. For many people, that’s easier said than done, but reviewing your finances and updating your budget from time to time can be a huge help.

If you’re afraid of budgeting, keep in mind that a budget can be a simple list of your monthly expenses and income. To ensure you don’t leave anything out, take a look at your recent financial statements.

Instead of using a credit card to cover shortfalls, see if there’s anything you can cut from your budget to come up with the money. You may also need to consider increasing your income, whether through a new job, a raise or a side job.

Pay within 30 days

As a general rule, always avoid using credit cards for purchases you can’t pay off within 30 days. By sticking to this rule, you’ll not only avoid racking up an increasing debt balance, but you can also avoid paying pricey interest charges.

If you’ve already accrued too much debt to pay off the full balance in 30 days, focus on paying as much as you can. You may be tempted to put extra cash toward other debt, like your mortgage or car payment, but keep in mind that the average credit card costs a lot more to carry a balance on than any other debt because of high interest rates.

By comparison,​​ the average interest rate on 60-month car loans was 7.88% in mid-2023, while it was 21.19% on credit cards.

Set up autopay

Missing a credit card payment can have huge ramifications for your finances. If you pay less than the minimum amount due or pay after the due date, you could face any or all of these consequences:

  • Interest charges: If you don’t pay off the full account balance by the due date, you’ll be charged interest on your balance.
  • Late fee: You can be charged up to ​​$30 for the first late payment and $41 for additional late payments.
  • Credit damage: If your payment is ​​30 or more days late, it will be recorded as “missed” on your credit reports for seven years and could cause a major drop in your scores.
  • APR increase: If you miss multiple payments, the card issuer may increase your interest to a ​​penalty rate as high as 29.99% APR.

What’s the easiest way to avoid missing a payment? Set up autopay through your credit card account. When you do, make sure you choose an amount that covers at least the minimum payment.

Get professional help

Need help figuring out how to manage credit issues and pay off debt for good? You’ve probably heard tempting radio commercials or seen ads on social media for ​​predatory debt relief programs. Instead of placing your trust in the hands of a potential scammer, reach out to a ​​​​nonprofit credit counseling agency for free professional support.

A credit counselor can review your debt and walk you through all of your ​​credit card management solutions, which may include:

  • ​​​Nonprofit debt consolidation
  • Asking your creditor for hardship assistance
  • A ​​debt management program (DMP)
  • ​​​Filing bankruptcy

Consider a balance transfer credit card

Moving your debt to a balance transfer credit card isn’t a permanent solution, but it can save you money and give you time to devise a plan.

A balance transfer credit card is a card that has 0% APR on debt that you transfer onto the card within roughly ​​12 to 21 months after account opening. The card may or may not have 0% APR on purchases made during that time.

During the 0% APR period, you’ll still have to make minimum monthly payments, but unlike other debt you won’t accrue interest and 100% of your payment will go toward your balance.

Look into a debt consolidation loan

Similar to balance transfer cards, a debt consolidation loan won’t wipe out your debt. But it can help with ​​credit card management by saving you money and helping you pay debt off faster.

Debt consolidation entails taking out a new loan and using it to pay off other debt. Using a loan to consolidate can be beneficial if the loan has a lower interest rate than your other debt, which is often the case when it comes to credit card debt.

Just keep in mind that you’ll have to qualify for a debt consolidation loan based on the lender’s requirements. If you have poor credit, you may have trouble getting approved. The lender may also charge fees that offset the savings you get from consolidating.

Make a plan ASAP

If you’re swimming in credit card debt, the worst thing you can do is hide from the problem. The longer you put off repayment, the more interest charges you’ll accrue and the harder it will be to pay off the debt. Plus, your credit scores may drop in the meantime.

Fortunately, our list has a solution for everyone, whether you simply need to adjust your spending habits to improve your ​​credit card management or you can’t pay off your debt without professional or legal intervention. Before making another credit card purchase, take at least one of these action steps to start immediately.


Written by Sarah Brady | Edited by Rose Wheeler

Sarah Brady is a financial writer and speaker who’s written for Forbes Advisor, Investopedia, Experian and more. She is also a former Housing Counselor (HUD) and Certified Credit Counselor (NFCC).


Read more:

  • How to Use a Credit Card Responsibly
  • Is a Credit Card Balance Transfer Right For You?
  • Credit 101: The Ultimate Guide to Managing Credit
  • What Is the Best Credit Card for First Timers?
  • How Much Does Your Credit Card Really Cost?

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