How should i approach my Credit Card debt?

I am currently struggling to pay off my credit card debt (Approximately $4000). My interests rate ranges from high to low on 5 different cards. I have been only making the minimum payments recently and my credit score is in the mid 700s. Would I be better off keeping all of my debt separate and trying to pay more than the minimum every month or should i combine all my debt into one loan that i can make 100+ payments a month with low interest?





Thank you for the responses!|||So long as you continue to make minimum payments on time for all your credit cards your credit rating will remain strong. In fact, credit card companies love it when you make only the minimum payment because they'll make more money from you with the interest you'll be paying. You have a good credit rating already so don't worry about that.





Really, your next step should be to do up a simple budget for yourself and ask yourself if there isn't something you can do without to free up some more money to pay down the debt faster. If you can't account for where your entire paycheck goes you most likely have some unnecessary spending going on. Even if you can find just an extra $25 per week by packing your own lunch instead of eating out or something like that you'll have an extra $100 to start paying down your debts faster. Finding some extra money like this to pay down your debts faster is going to be more important than what interest rate you have.





Not to say interest rate isn't important though. Many people are now recommending against getting a consolidation loan as you're thinking because so many people will clear off their credit cards with the money from the loan only to start spending on their cards and starting to rebuild that debt before they even pay off the consolidation loan. In a year or two they end up with a consolidation loan to repay on top of maxed out credit cards! If you are willing to take your credit cards out of your wallet and leave them at home to reduce the temptation to use them, a consolidation loan may work for you - just be extremely cautious to only spend on your cards something you can repay immediately and really you shouldn't be using your credit cards at all until the loan is paid off.





Your other option which is easier than applying for a new loan is to try to get your credit card interest rates reduced or do a balance transfer to move some of the debt on the highest interest rate cards to ones with lower interest rates. Of course that only works if you have available limit. Call your credit card company and ask if there's anyway they can reduce your credit card interest rate - some of them will reduce if you've been paying on time regularly but won't change it if you don't ask. Once you've tried this with each of your credit cards, try moving the balance from whatever card now has the highest interest rate to the one with the lowest or at least lower if you don't have available credit on that one. While you'e on the phone with your card companies, make sure the balance transfer rate is the same as your purchase interest rates (it should be, but sometimes it isn't always if you're on a special introductory offer with your card).





BTW, good for you for identifying this problem now - most people have the mindset that so long as they can make their minimum payments there is no problem and will continue along until they are in way too deep. Good luck on getting ahead!|||You can make the minimum payments. This will keep the card company off of your back, but you'll essentially just be paying on the interest.





If you find yourself in financial trouble, you may consider settling the debt with the card company.|||Make minimum payments on all cards. Pay off the card with the high interest first and then follow with other cards. Do not add any more on the cards. Focus on high interest card and you will be fine. You can transfer balance to a lower interest card, sometimes its a good or a bad thing.|||It is never good to close existing credit cards, more than one over a 6 month to a year period as this can have a negative impact on your credit score. Try and pay more over a period of time.|||I was in a situation worse than yours 10 years ago due to a company I invested in going bust. The first thing I did was call all of my credit card companies to see if there was any way to reduce the interest payments saying I had an offer from a competitor for a lower interest rate for the next 12 months and I was going to transfer the balance if they could not match the deal. In most cases, they agreed to match it.





Then as the others say, I paid off $10 over the minimum of the lowest interest cards and tried to pay double the minimum of the highest interest card to get that paid off first. I never paid just the minimum - I always tried to pay a bit more, even if it was only $5-10 more





Then for the first time in my life I started using Quicken. It came free on my computer but I had never looked at it before. And I became obsessive using it. I put in every bank account, each credit card debt and kept track of pretty much every penny I spent - transportation, food, utilities, clothing, entertainment, etc. Every morning before I left the house I looked at Quicken to see how much money I owed - and that would help me to not spend money on unnecessary things. I drank the crappy free coffee at work instead of buying the fancy Starbucks coffee every day, which saved $15/week or $60/month that could be put towards my credit card bills. Instead of eating out for lunch which I used to do almost every day I brought in my own sandwiches. Honestly if you are religious about using it you'll start to see in a month what you are spending on certain items and how you can reduce that. For example I cancelled my cable bill as that was costing over $40/month. I cancelled magazine and newspaper subscriptions. I found a cheaper phone plan. I cut back my energy and water consumption.





If I had an extra $25 in my bank account I would put that right towards the credit card bill even if it was not the end of the month - I just paid it online.|||You've got some Great answers! A couple things to add. If you don't want to spend money on Quicken or some other personal finance software, check out Mint.com. It's a free website from the same company that offers Quicken - it's not as nice, but it is free. It links to your online accounts, so it takes some of the work out of tracking every dollar you spend.





Most experts recommend targeting debt when you're trying to pay it off. Meaning you prioritize which debt to pay first, make the minimum payment on #2 and down on your list and put all extra payments toward #1 on your list. Once #1 is paid off, take what you were paying toward it (that minimum monthly payment plus the extra) and put it toward #2. If you pay a little extra here and there, it feels like forever before you actually pay one of those accounts off.





Linked below is an excel spreadsheet where you can run scenarios of the order to pay off your debt. Some say start with highest interest, some say start with lowest balance, but the minimum monthly payment is also a factor.