How to Manage Credit Card Debt Wisely with CCCU

When used responsibly, credit cards can be really beneficial. If you keep your balances low and consistently make on-time payments, you can effectively boost your credit score and improve your financial well-being. Some cards also offer travel rewards, and you might even get a 0% introductory interest rate to consolidate debt.
 
Having said that, one or more credit cards with high revolving balances can lead to substantial accumulated interest—and potentially missed payments if spending becomes unmanageable. If you're facing significant debt, our Portland community credit union is here to help. Find tips and guidance for managing credit card debt below.

How to manage a credit card

The best way to manage a credit card is to pay off your balance in full every month, which allows you to avoid paying interest on your purchases. Of course, if you've already racked up a lot of debt, this may be easier said than done. Still, it's a good goal to have.
 
If you can't pay your balance in full every month, it's best to use your cards sparingly or resist using them completely. Impulse buys and frivolous purchases can be a slippery slope when it comes to credit cards, so it's smart to use cash for those if you can. Also, try to carry no more than a 30% balance, which will help keep your credit score in a good place.

How to pay down your debt faster

 There are a few strategies to paying down credit card debt quickly. We recommend:
 

• Paying more than the minimum amount due every month
• Making at least one additional small payment toward your balance each month to cut down on interest accumulation
• Focusing on paying off one account at a time with larger monthly payments
• Going cold turkey with credit card spending
• Building a savings account to avoid having to use a line of credit
• Consolidating your debt by transferring your balances into one low-interest credit card or personal loan

 
There's no one-size-fits-all solution to paying down credit card debt. As long as you're making at least the minimum payment each month, you can implement a few or all of these strategies to give your get-out-of-debt plan a boost. However, if you’re looking for a way to make debt management easier, you may want to consider a credit card balance transfer that allows you to consolidate what you owe. Learn more about how to transfer a credit card balance below.
 

The do's and don'ts of balance transfers

What is a balance transfer? In essence, it means you'll open a new credit card or personal loan with a low APR (Annual Percentage Rate) and transfer your existing high-interest balances over to that account. When your debt is consolidated, you can make one payment a month toward paying it off, which may allow you to pay less interest overall.
 
The main dos and don'ts of balance transfers include:
 
Do compare credit card and loan offers
Do look for a card with a 0% introductory rate
Do consider a card with a low fixed-for-life APR
Don't accept the first balance transfer offer you get
Don't agree to the terms before adding up all the fees
Don’t make unnecessary purchases on your credit card
 
Some balance transfer credit cards come with 0% interest on balance transfers for the first six months, year, or sometimes longer. Ideally, you'll pay down your balance within that period to avoid paying any additional interest.

Get a low-interest balance transfer card from our Portland credit union

CCCU offers credit cards with 0% interest for the first 12 months when balance transfers are completed within a 90-day promotional window. If you're unable to pay off your balance within a year, you might consider our limited-time offer on a 5.99% APR credit card. As long as you transfer your balances within a 30-day promotional period, the interest rate stays fixed on transferred balances until they're paid off. Keep in mind that the interest on any new purchases will be set to a standard rate.

 

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