![The comprehensive guide to managing and resolving credit card debt](https://media-manager.starsinsider.com/gallery/1080/na_669fc259b4a7e.jpg)
![The comprehensive guide to managing and resolving credit card debt](https://media-manager.starsinsider.com/gallery/1080/na_669e1416986f2.jpg)
![The comprehensive guide to managing and resolving credit card debt](https://media-manager.starsinsider.com/gallery/1080/na_669e141b98150.jpg)
![The comprehensive guide to managing and resolving credit card debt](https://media-manager.starsinsider.com/gallery/1080/na_669fc31453479.jpg)
![The comprehensive guide to managing and resolving credit card debt](https://media-manager.starsinsider.com/gallery/1080/na_669e141e0d66e.jpg)
![The comprehensive guide to managing and resolving credit card debt](https://media-manager.starsinsider.com/gallery/1080/na_669e141eec88b.jpg)
![The comprehensive guide to managing and resolving credit card debt](https://media-manager.starsinsider.com/gallery/1080/na_669e141b4c0be.jpg)
![The comprehensive guide to managing and resolving credit card debt](https://media-manager.starsinsider.com/gallery/1080/na_669e142771029.jpg)
![The comprehensive guide to managing and resolving credit card debt](https://media-manager.starsinsider.com/gallery/1080/na_669e143b35502.jpg)
![The comprehensive guide to managing and resolving credit card debt](https://media-manager.starsinsider.com/gallery/1080/na_669e143c4ef22.jpg)
![The comprehensive guide to managing and resolving credit card debt](https://media-manager.starsinsider.com/gallery/1080/na_669e14360778f.jpg)
![The comprehensive guide to managing and resolving credit card debt](https://media-manager.starsinsider.com/gallery/1080/na_669e143fb05f1.jpg)
![The comprehensive guide to managing and resolving credit card debt](https://media-manager.starsinsider.com/gallery/1080/na_669e143b9b24a.jpg)
![The comprehensive guide to managing and resolving credit card debt](https://media-manager.starsinsider.com/gallery/1080/na_669e143c67fac.jpg)
![The comprehensive guide to managing and resolving credit card debt](https://media-manager.starsinsider.com/gallery/1080/na_669e1447b0ec1.jpg)
![The comprehensive guide to managing and resolving credit card debt](https://media-manager.starsinsider.com/gallery/1080/na_669e1448a9fec.jpg)
![The comprehensive guide to managing and resolving credit card debt](https://media-manager.starsinsider.com/gallery/1080/na_669e145bb1519.jpg)
![The comprehensive guide to managing and resolving credit card debt](https://media-manager.starsinsider.com/gallery/1080/na_669e144b754f5.jpg)
![The comprehensive guide to managing and resolving credit card debt](https://media-manager.starsinsider.com/gallery/1080/na_669e14520e860.jpg)
![The comprehensive guide to managing and resolving credit card debt](https://media-manager.starsinsider.com/gallery/1080/na_669e144c3ae04.jpg)
![The comprehensive guide to managing and resolving credit card debt](https://media-manager.starsinsider.com/gallery/1080/na_669e145959e37.jpg)
![The comprehensive guide to managing and resolving credit card debt](https://media-manager.starsinsider.com/gallery/1080/na_669e15388e2ad.jpg)
![The comprehensive guide to managing and resolving credit card debt](https://media-manager.starsinsider.com/gallery/1080/na_669e1536b0e9e.jpg)
![The comprehensive guide to managing and resolving credit card debt](https://media-manager.starsinsider.com/gallery/1080/na_669e1541523c0.jpg)
![The comprehensive guide to managing and resolving credit card debt](https://media-manager.starsinsider.com/gallery/1080/na_669e1538059b5.jpg)
![The comprehensive guide to managing and resolving credit card debt](https://media-manager.starsinsider.com/gallery/1080/na_669e15374aff8.jpg)
![The comprehensive guide to managing and resolving credit card debt](https://media-manager.starsinsider.com/gallery/1080/na_669e154b09a25.jpg)
![The comprehensive guide to managing and resolving credit card debt](https://media-manager.starsinsider.com/gallery/1080/na_669e154cc103c.jpg)
See Also
See Again
© Shutterstock
0 / 28 Fotos
What is credit debt?
- Credit debt is an unsecured, or not backed by collateral, type of liability. Borrowers accumulate debt by opening credit card accounts that each have different terms and credit limits. Credit accounts are all tracked by credit bureaus.
© Shutterstock
1 / 28 Fotos
The positive impact of credit card debt
- Credit card use has both positive and negative effects on your credit score. Some benefits are reward incentives such as cashback or points that can be used towards other future purchases or to pay down the balance you already have. Using credit debt wisely will help you build a credit score.
© Shutterstock
2 / 28 Fotos
What is a credit score?
- A credit score is the prediction of how likely you are to pay a loan back on time based on information from your credit reports. The higher the score, the more likely you are to get approved for loans and for better rates
© Shutterstock
3 / 28 Fotos
The negative impact of credit card debt on your credit score
- If you are accumulating debt or using too much against your credit limit, it will negatively impact your score and make it more challenging to do things like buy a house or secure a loan. Be sure to balance usage with payoffs to avoid negative marks on your report.
© Shutterstock
4 / 28 Fotos
Taking stock of your debt: gather your statements
- To better understand your overall financial health, it's important to collect all of your credit statements so you know what outstanding debts you have and applicable interest rates and associated fees.
© Shutterstock
5 / 28 Fotos
List your debts
- Make a detailed list of all the credit cards you have (even if you don't currently use them). Write down balances, interest rates, and minimum payments. Being aware of your financial situation will help you calculate potential tax liabilities and plan to reduce your debt effectively.
© Shutterstock
6 / 28 Fotos
Calculate your total debt
- Calculating your credit card debt will allow you to assess your financial obligations and plan for repayment. Additionally, it's important for tax purposes as it can influence eligibility for certain deductions and credits.
© Shutterstock
7 / 28 Fotos
Strategies for managing credit card debt: budgeting
- It's important to create a budget as it will help you track your income and expenses. This means that you will know what's left over to pay down credit card debt and ultimately relieve and alleviate more (if not all) of your financial burden.
© Shutterstock
8 / 28 Fotos
Reducing expenses
- Cutting back on unnecessary spending means that you'll have more money to repay debt and have a better financial outlook in general.
© Shutterstock
9 / 28 Fotos
Debt snowball vs. debt avalanche
- The debt snowball method involves paying down the minimum amount on all of your credit cards except the card with the lowest balance. The debt avalanche method works similarly, but instead of targeting your lowest balance first, you focus on the card with the highest interest rate.
© Shutterstock
10 / 28 Fotos
Debt consolidation
- Debt consolidation means taking out a new loan or applying for a new credit card to pay off other existing loans or credit cards. By combining multiple debts into one, larger loan, you may be able to obtain more favorable payoff terms.
© Shutterstock
11 / 28 Fotos
Taking action: contact your credit card issuers
- Taking action on your debt is important. One way to do so is to contact the issuer of your credit cards. Oftentimes, credit card companies will have options such as hardship programs or lower interest rates that they can offer to those who communicate the need.
© Shutterstock
12 / 28 Fotos
Negotiate with creditors - Some lenders may be willing to negotiate with borrowers to offer relief options and minimize the lender's financial loss. Common negotiation strategies include asking for a reduced interest rate, creating a repayment plan, and considering debt consolidation.
© Shutterstock
13 / 28 Fotos
Consider a debt management plan
- By working with a credit counseling agency, you can likely create a structured repayment plan that consolidates multiple payments into one monthly credit card payment. With these plans you might also be able to waive fees, making it easier to pay off.
© Shutterstock
14 / 28 Fotos
Explore debt settlement
- Debt settlement involves negotiating with creditors to pay a lump sum that is less than the total amount owed. While this option can significantly reduce your debt, it may result in taxable income for the forgiven debt amount, leading to potential tax liabilities.
© Shutterstock
15 / 28 Fotos
Building financial wellness: increase your income
- Another way to offset debt is to build your financial wellness and increase your income. Many people take on an extra part-time job or even a side hustle to bring in extra money. This money can help pay down debts quicker.
© Shutterstock
16 / 28 Fotos
Emergency fund
- It's important to always have an emergency fund or extra money that's put away for times you really need something. Try to use your emergency fund money instead of putting large purchases onto a credit card.
© Shutterstock
17 / 28 Fotos
Automate your payments
- To avoid missed payments and subsequent associated late fees, always try to have your credit payments automated. Take out the guesswork in having to remember when payments are due.
© Shutterstock
18 / 28 Fotos
Avoid impulse purchases
- Impulse shopping can quickly add debt to your credit card. Some tips to avoid it include not shopping when you're emotional, waiting a day (or longer) after deciding you want or need something, and going with a plan in mind of what you'll be buying and bringing only that amount of money in cash.
© Shutterstock
19 / 28 Fotos
Review your credit report regularly
- Regularly checking and reviewing your credit reports will mean that you are not only aware of what needs to be addressed but you can also catch mistakes that might occur. Be sure that the steps you're taking are impactful ones.
© Shutterstock
20 / 28 Fotos
Living debt-free: celebrate milestones
- To stay motivated along the way, celebrate milestones. If you pay off a card or even make a small yet impactful payment towards your debt, be sure to acknowledge this and how important even the small steps are.
© Shutterstock
21 / 28 Fotos
Reward yourself
- When you hit important debt repayment goals, know that it's okay to reward yourself. Be smart though, don't go buy something else expensive on your credit card that you'll then have to pay off. But a nice coffee or sweet treat can be an excellent reward to help you stay motivated.
© Shutterstock
22 / 28 Fotos
Learn from your mistakes
- Learning from your past financial mistakes is a very important skill. It involves assessing what you did previously, how challenging it was, and how stressful things were as well as how to avoid this in the future.
© Shutterstock
23 / 28 Fotos
Develop a healthy relationship with money
- A great first step to develop a healthy relationship with money is to create a plan focused on budgeting, saving, and investing. Aim to set realistic goals and prioritize needs over wants. Remember how stressful debt was or would be and aim to avoid it.
© Shutterstock
24 / 28 Fotos
More info about credit debt
- Credit card debt is not only stressful, but it's also multifaceted. There is so much more to know about debt, and these next slides aim to share a few bits of information at a high level.
© Shutterstock
25 / 28 Fotos
Debt scams
- Unfortunately, there are supposed debt relief companies out there who charge high upfront fees and promise to eliminate your debt. However, no real service is delivered. Be sure to always verify the legitimacy or these companies by checking reviews and credentials.
© Shutterstock
26 / 28 Fotos
When to seek professional help
- If at all possible, seek a credit counselor or financial advisor before your debt becomes unmanageable or you miss payments. Debt can be debilitating so it's important to seek help from those who know how to be of assistance.
Sources: (Investopedia) (Yahoo! Finance) (Equifax) (Ramsey)
See also: Essential financial guidelines everyone should be familiar with
© Shutterstock
27 / 28 Fotos
© Shutterstock
0 / 28 Fotos
What is credit debt?
- Credit debt is an unsecured, or not backed by collateral, type of liability. Borrowers accumulate debt by opening credit card accounts that each have different terms and credit limits. Credit accounts are all tracked by credit bureaus.
© Shutterstock
1 / 28 Fotos
The positive impact of credit card debt
- Credit card use has both positive and negative effects on your credit score. Some benefits are reward incentives such as cashback or points that can be used towards other future purchases or to pay down the balance you already have. Using credit debt wisely will help you build a credit score.
© Shutterstock
2 / 28 Fotos
What is a credit score?
- A credit score is the prediction of how likely you are to pay a loan back on time based on information from your credit reports. The higher the score, the more likely you are to get approved for loans and for better rates
© Shutterstock
3 / 28 Fotos
The negative impact of credit card debt on your credit score
- If you are accumulating debt or using too much against your credit limit, it will negatively impact your score and make it more challenging to do things like buy a house or secure a loan. Be sure to balance usage with payoffs to avoid negative marks on your report.
© Shutterstock
4 / 28 Fotos
Taking stock of your debt: gather your statements
- To better understand your overall financial health, it's important to collect all of your credit statements so you know what outstanding debts you have and applicable interest rates and associated fees.
© Shutterstock
5 / 28 Fotos
List your debts
- Make a detailed list of all the credit cards you have (even if you don't currently use them). Write down balances, interest rates, and minimum payments. Being aware of your financial situation will help you calculate potential tax liabilities and plan to reduce your debt effectively.
© Shutterstock
6 / 28 Fotos
Calculate your total debt
- Calculating your credit card debt will allow you to assess your financial obligations and plan for repayment. Additionally, it's important for tax purposes as it can influence eligibility for certain deductions and credits.
© Shutterstock
7 / 28 Fotos
Strategies for managing credit card debt: budgeting
- It's important to create a budget as it will help you track your income and expenses. This means that you will know what's left over to pay down credit card debt and ultimately relieve and alleviate more (if not all) of your financial burden.
© Shutterstock
8 / 28 Fotos
Reducing expenses
- Cutting back on unnecessary spending means that you'll have more money to repay debt and have a better financial outlook in general.
© Shutterstock
9 / 28 Fotos
Debt snowball vs. debt avalanche
- The debt snowball method involves paying down the minimum amount on all of your credit cards except the card with the lowest balance. The debt avalanche method works similarly, but instead of targeting your lowest balance first, you focus on the card with the highest interest rate.
© Shutterstock
10 / 28 Fotos
Debt consolidation
- Debt consolidation means taking out a new loan or applying for a new credit card to pay off other existing loans or credit cards. By combining multiple debts into one, larger loan, you may be able to obtain more favorable payoff terms.
© Shutterstock
11 / 28 Fotos
Taking action: contact your credit card issuers
- Taking action on your debt is important. One way to do so is to contact the issuer of your credit cards. Oftentimes, credit card companies will have options such as hardship programs or lower interest rates that they can offer to those who communicate the need.
© Shutterstock
12 / 28 Fotos
Negotiate with creditors - Some lenders may be willing to negotiate with borrowers to offer relief options and minimize the lender's financial loss. Common negotiation strategies include asking for a reduced interest rate, creating a repayment plan, and considering debt consolidation.
© Shutterstock
13 / 28 Fotos
Consider a debt management plan
- By working with a credit counseling agency, you can likely create a structured repayment plan that consolidates multiple payments into one monthly credit card payment. With these plans you might also be able to waive fees, making it easier to pay off.
© Shutterstock
14 / 28 Fotos
Explore debt settlement
- Debt settlement involves negotiating with creditors to pay a lump sum that is less than the total amount owed. While this option can significantly reduce your debt, it may result in taxable income for the forgiven debt amount, leading to potential tax liabilities.
© Shutterstock
15 / 28 Fotos
Building financial wellness: increase your income
- Another way to offset debt is to build your financial wellness and increase your income. Many people take on an extra part-time job or even a side hustle to bring in extra money. This money can help pay down debts quicker.
© Shutterstock
16 / 28 Fotos
Emergency fund
- It's important to always have an emergency fund or extra money that's put away for times you really need something. Try to use your emergency fund money instead of putting large purchases onto a credit card.
© Shutterstock
17 / 28 Fotos
Automate your payments
- To avoid missed payments and subsequent associated late fees, always try to have your credit payments automated. Take out the guesswork in having to remember when payments are due.
© Shutterstock
18 / 28 Fotos
Avoid impulse purchases
- Impulse shopping can quickly add debt to your credit card. Some tips to avoid it include not shopping when you're emotional, waiting a day (or longer) after deciding you want or need something, and going with a plan in mind of what you'll be buying and bringing only that amount of money in cash.
© Shutterstock
19 / 28 Fotos
Review your credit report regularly
- Regularly checking and reviewing your credit reports will mean that you are not only aware of what needs to be addressed but you can also catch mistakes that might occur. Be sure that the steps you're taking are impactful ones.
© Shutterstock
20 / 28 Fotos
Living debt-free: celebrate milestones
- To stay motivated along the way, celebrate milestones. If you pay off a card or even make a small yet impactful payment towards your debt, be sure to acknowledge this and how important even the small steps are.
© Shutterstock
21 / 28 Fotos
Reward yourself
- When you hit important debt repayment goals, know that it's okay to reward yourself. Be smart though, don't go buy something else expensive on your credit card that you'll then have to pay off. But a nice coffee or sweet treat can be an excellent reward to help you stay motivated.
© Shutterstock
22 / 28 Fotos
Learn from your mistakes
- Learning from your past financial mistakes is a very important skill. It involves assessing what you did previously, how challenging it was, and how stressful things were as well as how to avoid this in the future.
© Shutterstock
23 / 28 Fotos
Develop a healthy relationship with money
- A great first step to develop a healthy relationship with money is to create a plan focused on budgeting, saving, and investing. Aim to set realistic goals and prioritize needs over wants. Remember how stressful debt was or would be and aim to avoid it.
© Shutterstock
24 / 28 Fotos
More info about credit debt
- Credit card debt is not only stressful, but it's also multifaceted. There is so much more to know about debt, and these next slides aim to share a few bits of information at a high level.
© Shutterstock
25 / 28 Fotos
Debt scams
- Unfortunately, there are supposed debt relief companies out there who charge high upfront fees and promise to eliminate your debt. However, no real service is delivered. Be sure to always verify the legitimacy or these companies by checking reviews and credentials.
© Shutterstock
26 / 28 Fotos
When to seek professional help
- If at all possible, seek a credit counselor or financial advisor before your debt becomes unmanageable or you miss payments. Debt can be debilitating so it's important to seek help from those who know how to be of assistance.
Sources: (Investopedia) (Yahoo! Finance) (Equifax) (Ramsey)
See also: Essential financial guidelines everyone should be familiar with
© Shutterstock
27 / 28 Fotos
The comprehensive guide to managing and resolving credit card debt
Your path to financial freedom
© Shutterstock
Credit card debt is something that many of us face every day. It's a daunting challenge that can negatively impact all areas of our life. However, if you take the time to understand it and address it head on then you can become more financially stable. From what is credit card debt to budgeting and even to debt consolidation options, this go-to guide will give you the tools you need to be successful, happy, and debt-free. Embrace the journey to financial freedom and take your first steps by reading this guide.
Curious how you can minimize or eliminate credit card debt? Click through now.
RECOMMENDED FOR YOU
![The angel number of each zodiac sign](https://media-manager.starsinsider.com/640/na_66daea83cf3d5.jpg)
![Do you have a Sunday reset routine?](https://media-manager.starsinsider.com/640/na_66dabb3c56bfa.jpg)
![Natural spies: Animals used in espionage](https://media-manager.starsinsider.com/640/na_66d9cea393994.jpg)
![Miracles and a temper? Experts investigate Jesus' childhood](https://media-manager.starsinsider.com/640/na_66dafd980019e.jpg)
![Exploring the tree house hotel where Princess Elizabeth learned she'd be Queen](https://media-manager.starsinsider.com/640/na_66daf9f737929.jpg)
![The top 30 most valuable brands of 2024](https://media-manager.starsinsider.com/640/na_66d6f050a2e93.jpg)
![Countries where bosses can't contact employees after hours](https://media-manager.starsinsider.com/640/na_66dae767723a3.jpg)
![The sad reality of femicide around the world](https://media-manager.starsinsider.com/640/na_66dace5c31b08.jpg)
![Who is the top goal scorer of all time?](https://media-manager.starsinsider.com/640/na_66dac9cd5b549.jpg)
![The amazing life of Jane Goodall, the world's most famous primatologist](https://media-manager.starsinsider.com/640/na_66d9c5a6523fb.jpg)
![What was the Neanderthal diet like?](https://media-manager.starsinsider.com/640/na_66d9c4ba462b7.jpg)
![The greatest surfers of all time](https://media-manager.starsinsider.com/640/na_66d82a3991191.jpg)
![Fascinating facts you probably didn't know about the Oval Office](https://media-manager.starsinsider.com/640/na_66db0390a5798.jpg)
![How does tennis scoring actually work?](https://media-manager.starsinsider.com/640/na_66d82a540f53f.jpg)
![What would the world look like if mosquitos were eradicated?](https://media-manager.starsinsider.com/640/na_66d5eac49dc86.jpg)
![Countries that have banned X, TikTok, and Facebook](https://media-manager.starsinsider.com/640/na_66d72124468bd.jpg)
![Outdated workplace trends to say goodbye to](https://media-manager.starsinsider.com/640/na_66d8529e0ac2a.jpg)
![American football players who became coaches](https://media-manager.starsinsider.com/640/na_66d59a4ede1a9.jpg)
![Experts predict a tsunami in Europe with 100% probability](https://media-manager.starsinsider.com/640/na_66d97aef417a7.jpg)
![The greatest female wrestlers of all time](https://media-manager.starsinsider.com/640/na_66d5d7aa902d2.jpg)
![How your zodiac sign influences your personality traits](https://media-manager.starsinsider.com/640/na_66d84e22a505a.jpg)
![Unique ways your zodiac sign sabotages romantic relationships](https://media-manager.starsinsider.com/640/na_66d84aee582cb.jpg)
![Japan's trick to reverse population collapse](https://media-manager.starsinsider.com/640/na_66d719469c392.jpg)
![The terrifying history of the dark web](https://media-manager.starsinsider.com/640/na_66d84942d0d7a.jpg)
![The F1 drivers with the most pole positions ever](https://media-manager.starsinsider.com/640/na_66d71d2095a6e.jpg)
![The most (and least) intelligent zodiac signs, ranked](https://media-manager.starsinsider.com/640/na_66d8447cb1c5d.jpg)
![The fascinating spiritual meaning of your animal dreams, revealed](https://media-manager.starsinsider.com/640/na_66d83ec1a1923.jpg)
![Are you an introvert? These are the telltale signs](https://media-manager.starsinsider.com/640/na_66d840333af90.jpg)
![The sad reasons why some good relationships don't last](https://media-manager.starsinsider.com/640/na_66d84195c34c0.jpg)
![Clear signs you've hit a midlife crisis](https://media-manager.starsinsider.com/640/na_66d83d116bd09.jpg)
![Stunning pictures of the world's strangest and rarest weather phenomena](https://media-manager.starsinsider.com/640/na_66d83c14b308e.jpg)
![These zodiac signs are the funniest](https://media-manager.starsinsider.com/640/na_66d8329f2cd1f.jpg)
![You can live in luxury on a budget in these countries](https://media-manager.starsinsider.com/640/na_66d82d763b2b6.jpg)
![This is why even the best players miss penalties during a shoot-out](https://media-manager.starsinsider.com/640/na_66d82c209a643.jpg)
![Which countries have the most bald men?](https://media-manager.starsinsider.com/640/na_66d838cccf6e9.jpg)
![Decode your pup: strange dog behaviors explained](https://media-manager.starsinsider.com/640/na_66d086ddd77a1.jpg)
MOST READ
- Last Hour
- Last Day
- Last Week
-
1
CELEBRITY Relationships
-
2
LIFESTYLE Wealth
-
3
HEALTH Bad habit
-
4
LIFESTYLE History
-
5
FOOD Food storage
-
6
LIFESTYLE Secondhand
-
7
LIFESTYLE Secondhand
-
8
HEALTH Risks
-
9
-
10
LIFESTYLE Politics
Why is the far-right gaining popularity among young people in Europe?