When you are in debt, it can feel like an impossible situation. You look at the balance on your cards and the interest rate, and it can feel like there is no way out. The problem is compounded further if your income is limited and you need to continue using your cards, increasing your debt level further. This article looks at the issue in detail and provides some tips for repaying your credit cards.

1. Limit spending on high-interest-rate cards

To give yourself a good chance of repaying a specific credit card, it's crucial to limit your spending on that card. The higher the interest rate, the more important this tip is to follow. If you need to use a form of borrowing in the short term, then look into other options.

Remember, credit cards tend to be an expensive way to borrow. Other options, such as taking out a low-interest-rate loan, might be better for you. Some banks might be able to offer you an interest-free overdraft facility, so it's well worth exploring your options. Ideally, you want to stop spending on a high-interest-rate credit card.

2. Reduce or eliminate the interest

Sometimes your biggest problem is the interest rate rather than the debt. This is because your monthly payments essentially cover the interest, so you aren't reducing your debt very much. To deal with this problem, you can ask the bank to reduce the interest rate on the card.

Your options may be limited if you don't have a good credit score. However, carrying debt does not necessarily mean your credit score is bad. Therefore, if you have a good credit score, apply for a 0% card and transfer your debt. Once you have done that, stop using the card and pay as much as you can afford each month. The minimum payment should be low if you have eliminated the interest rate.

3. Pay more than the minimum payment

Remember, the banks set the minimum payment, designed to keep you in debt longest while the banks collect interest from you. Therefore, if you only pay the minimum payment each month, clearing your debt will take a long time. If you continue using the card in the meantime, you will potentially stay in debt forever.

Of course, there is an argument for only paying the minimum monthly payment. Doing so keeps your account in good order and will reduce your debt if you have a 0% card and aren't spending on it. However, for most people paying over the minimum payment is a good idea. This doesn't mean you have to pay off your balance in full; focus on paying an amount you can afford over the set minimum.

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When you are in debt, it can be hard to find a way out. However, it doesn't have to be as hopeless as it sometimes seems. There are simple things you can do to repay your credit cards. So remember to limit spending on high-interest rate cards, reduce or eliminate interest wherever possible, and pay over the minimum payment.