Suze Orman's 5 tips to beat credit card debt | finder.com

Suze Orman’s credit card tips

Suze Orman is a genius when it comes to tips that may help you get out of credit card debt once and for all.

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Some people use their credit card to help pay bills and buy necessities. But, if you are broke because you just enjoy spending money on credit, you need to be ready for a change.

The same strategies can be used to help get you out of debt whether you are in this situation due to necessity or indulgences. The idea is to pay the lowest interest rate possible, as quickly as possible, without falling into all of the credit card traps the companies have in fine print.

Compare balance transfer credit cards to lower your interest

Name Product Purchase APR Balance transfer APR Annual fee Filter values
0% intro for the first 18 months (then 12.99% to 20.99% variable)
0% intro for the first 18 months (then 12.99% to 20.99% variable)
$0
An 18 months 0% intro APR period on both purchases and balance transfers, plus zero foreign transaction fees, makes this is a strong well-rounded card. See Rates and Fees
0% intro for the first 15 months (then 16.24%, 22.24% or 26.24% variable)
0% intro for the first 15 months (then 16.24%, 22.24% or 26.24% variable)
$0
Earn unlimited 1.5% cash back on every purchase, every day.
0% intro for the first 12 months (then 14.99% to 24.99% variable)
0% intro for the first 12 months (then 14.99% to 24.99% variable)
$0
Earn 3% cash back on up to $10,000 in the first 12 months, then 1.5% on all purchases. See Rates and Fees.
15.99% to 25.49% variable
0% intro for the first 12 billing cycles (then 15.99% to 25.49% variable)
$0
When you spend $500 on your card within the first 90 days, you’ll receive a $150 cash back bonus. Rates & Fees
0% intro for the first 12 months (then 14.99% to 25.99% variable)
0% intro for the first 12 months (then 14.99% to 25.99% variable)
$95
Earn $250 bonus cash back after you spend $1,000 on purchases in the first 3 months. Rates & fees
0% intro for the first 15 months (then 16.99% to 25.74% variable)
0% intro for the first 15 months (then 16.99% to 25.74% variable)
$0
Earn 3% cash back on all purchases in your first year up to $20,000 spent, then earn 1.5% cash back after that.
0% intro for the first 15 months (then 16.24%, 22.24% or 26.24% variable)
0% intro for the first 15 months (then 16.24%, 22.24% or 26.24% variable)
$0
Earn $150 after spending $500 in the first 3 months.
0% intro for the first 15 months (then 16.99% to 25.74% variable)
0% intro for the first 15 months (then 16.99% to 25.74% variable)
$0
Earn $200 cash back after spending $500 in the first 3 months from account opening.
14.99%, 19.99% or 24.99% variable
0% intro for the first 12 billing cycles (then 14.99%, 19.99% or 24.99% variable)
$0
Earn $200 cash back when you spend $500 within 90 days after account opening.
16.99% variable
0% intro for the first 15 billing cycles (then 16.99% variable)
$495
Receive an annual $100 air travel credit toward flight-related purchases including airline tickets, baggage fees, upgrades and more.

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Suze Orman

Suze Orman

  • Suze Orman is an author, financial adviser and motivational speaker
  • Suze has a B.A. in social work
  • Hosted the “The Suze Orman Show”

Lower the interest rate

  • Negotiate. If you have a good credit history and have been making the minimum payment on your card on time every month, you may be able to negotiate a lower rate with your credit card company.
  • Balance transfer. Transfer your debt to a card with a lower interest rate and save on interest. Let your current card provider know that you will have to do a balance transfer if your rate is not lowered and they may give you a better deal because they do not want to lose your business. It is important to not make any purchases on the new card as this will completely cancel out any benefits of switching cards.

Did you know?

If you have a good credit card history and have been making at least the minimum payments per month, then you should not cancel your old cards. They hold a history of your payments that influence your credit rating. All you really need to do is cut them up so that you cannot use them, without canceling your cards completely.

Be sure to make payments

Per the fine print in most terms of conditions, any time you make a late payment, your 0% deal is terminated. Even if you are making regular payments on your new 0% interest rate card, credit issuers will be watching your credit reports to see if you have been late with payments on any of your other cards, not just theirs. This can cancel out the zero deal in some cases as well.

Must read: What are credit card companies getting from offering a 0% interest rate?

They want you to make a mistake using the card so they can stop the 0% interest rate and start charging you a 20% or higher rate of interest. Always pay your credit card bills before the due date. If you are mailing in the payment, mail it out five days before it is due.

If you do not qualify for a 0% deal Suze Orman says…

It’s time to start working on changing your credit history so that you can qualify later.

  • Credit score. You can boost this by paying at least the minimum on your monthly payment every month on time. After you have done this for a while your score should start to rise.
  • Debit to credit limit ratio. It is never wise to exhaust your entire credit limit. By keeping a low balance that is a fraction of your available credit limit, your ratio will decline and your credit score should go up. If you do not see it rising you can call up your credit card company and ask them to boost your credit limit — only if you’re sure you can control your spending. By raising this limit your ratio is going to fall because your balances will stay the same.

Working with high interest rates

List your credit cards in order of high interest rate first and low interest rate last. Ignore the balances on all of the cards while you are doing this. Once you have gathered these cards, make sure you make all of your minimum monthly payments on time, but add a little extra to the payment for the card with the highest interest rate.

You can save thousands of dollars in interest charges by pushing hard and making your extra payments as big as you can. Continue this way until the first card, the one with the highest interest rate, is totally paid off. Then start doing the same with the second card in line. Any extra payments that you were able to pay on the first card should be applied to the second one now.

Always keep track of your credit rating until you find that you are able to qualify for a 0% or low rate balance transfer. This is one of the credit card tips you must keep in mind and not forget.

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Pay off your credit card wisely

A credit card debt is unsecured, so if you cannot repay the debt, they cannot come after your assets to repay the money.

  • Home equity line of credit. A home equity line of credit is secured, so if you miss your payments your bank can use your collateral, which is your home, as a payment. You can be forced to sell your home in order to pay off the balance — you should never offer your home as collateral to get out of a credit card situation.
  • Retirement funds. You should also never borrow money using any of your retirement savings either. Some of these loans will be subject to double taxing once you have reached the age of retirement and have different requirements that must be fulfilled where you could possibly lose all of your savings. You may also have penalties and fees to pay as well.

Credit counseling

A good credit counselor will go over your entire financial situation before anything is proposed. You’ll typically be required to go to some classes to get help with money management techniques and to learn better spending habits.

Suze Orman also goes on to say that a debt management plan may be the right thing if you have stopped making payments altogether. A payment schedule will be set up with the credit card companies that is mutually agreed on by both of you. You may not be able to qualify for this plan if your counselor doesn’t think that your credit card debt can be handled within a few years time.

Don’t get ripped off

With the amount of debt problems on the rise it is not surprising that some credit counseling companies are taking advantage of the situation by charging extremely high rates for advice. Be careful when choosing a credit counseling company and make sure that they are fair and honest. You can ask for references if you need any help picking one out.

Also make sure that you only have to pay one fee monthly and not one for each separate credit card. Understand all of the terms of repayment and get everything explained in writing before you go ahead and sign anything at all.Back to top

Compare credit cards

Name Product Filter values Rewards Purchase APR Annual fee
7x points on Hilton Honors purchases, 5x at US restaurants, US supermarkets and US gas stations, 3x on all other purchases
17.74% to 26.74% variable
$0
Earn 75,000 Hilton Honors Bonus Points after you spend $1,000 in purchases on the card within your first 3 months of card membership. Rates & fees
N/A
0% intro for the first 18 months (then 12.99% to 20.99% variable)
$0
An 18 months 0% intro APR period on both purchases and balance transfers, plus zero foreign transaction fees, makes this is a strong well-rounded card. See Rates and Fees
1.5% cash back on all purchases
0% intro for the first 15 months (then 16.24%, 22.24% or 26.24% variable)
$0
Earn unlimited 1.5% cash back on every purchase, every day.
6% on select US streaming services, 3% on transit and US gas stations, 6% at US supermarkets on up to $6,000 annually, then 1% after that and on all other purchases
0% intro for the first 12 months (then 14.99% to 25.99% variable)
$95
Earn $250 bonus cash back after you spend $1,000 on purchases in the first 3 months. Rates & fees
CardMatch™ from creditcards.com
CardMatch™ from creditcards.com
See terms
See issuer's website
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Can't decide on a card? Get personalized credit card offers with CardMatch™.

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