A maxed out credit card can hold up your financial growth.
Maxing out a credit card can place a lot of stress on your finances and your life. Here are a few key steps you can take to get your spending under control and pay off your card.
What does maxed out mean?
Maxing out your credit card means you’ve reached your credit limit and can’t use the card for any further purchases. To start using your credit card for purchases again, you’ll need to pay off some of your card balance.
What to do if you maxed out your credit card
If you’ve maxed out your credit card and are having trouble paying down your balance, here are the steps you should take to pay off your credit card balance in full.
If you keep making purchases on your card each month, you’ll likely keep bumping up against your credit limit, making it difficult to pay off your card.
If you need some help to curb your spending, try making it more difficult to use your credit card. For example, you might take you credit cards out of your wallet for trips where you don’t plan on purchasing anything.
Create a Plan/Budget
Consider writing down all your expenses and sorting them by fixed expenses and variable expenses. Fixed expenses are things such as mortgage or rent, car payments, utilities, etc. Variable expenses include items such as gas, groceries and restaurants.
Then take your income and budget it out for each of these expenses. Once complete, see if you have any money left or if you’ve over budgeted your income.
If you have extra money, put towards either creating a savings account or paying off your credit cards. It’s important to create a savings account if you already don’t have one. It may seem difficult to put money into savings while you still have a lot of credit card debt, but it helps you stay prepared for unforeseen events. Anything that doesn’t go into your savings account should then go toward your credit card balance.
Compare Balance Transfer credit cards
Perform a balance transfer to a new credit card
It is sometimes hard to pay more than the minimum balance if you have a high interest rate. Look to see if there is another card with a lower interest rate. Once you find a credit card with a lower interest rate, see if that credit card company will allow you to transfer your balance. Check out our balance transfer page for more information.
While it can feel impossible to get out from under a maxed out credit card, a little planning can chip away at your balance. Take care to monitor your finances and stick to your budget and you’ll have your card paid down soon enough. Take advantage of a balance transfer credit card for an extra edge in paying down your balance.
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