Five Practical Ways to Save on Credit Card Debt

Let's face it- nobody likes being in debt. And yet, more Americans are in debt now than ever before. Whether you blame it on rising gas prices, the failing economy or simply unwise spending, credit card debt is a national problem that cannot be ignored. Instead, consumers should focus on paying off their credit card debt and finding the best ways to balance their credit card bills. Failing to pay credit card bills can ruin a family's credit report, can cause higher fees on other expenses such as insurance policies and trigger a myriad of problems in the future. Following the guidelines below can help consumers save on credit card debt and learn better ways to manage credit card usage in the future.

1. Pay as you "play." Even if you don't have a payment scheduled, it's a good idea to send the credit card company a little bit of money when you have the funds available. Because interest is compounded for each day that you are late on your payments, paying what you can even while you continue to spend (or have outstanding debts) will reduce the overall interest that you'll be paying. Paying part of your debts as soon as possible can help save thousands of dollars in credit card debt each year.
2. Balance the load. If you owe money on one credit card, stop using that card and begin to put expenses on a second card. Use the card with the lower interest rate on large purchases or at times when you think that you won't be able to pay the balance. Pay the second credit card each month in full to avoid late fees on both cards and unnecessary interest rates. Moreover, if you keep good standing for one credit card, the company will likely give you a grace period if you are late on one payment. Knowing this can help you avoid interest fees if you're making a big purchase that you plan on paying off in the near future. This strategy will also train you to rethink each purchase which will help to avoid your credit card debt from spiraling out of control.
3. Arrange for an "auto-pay." Most consumers are so busy worrying about interest fees that they forget about late fees which can amount to hundreds of dollars over the course of the year. To avoid this steep penalty, card holders can arrange for automatic payments through which even partial payments can be transferred to the credit card company on time. It is worthwhile to have the money transferred a few days before the bill's due date so that in case the credit card company adjusts your payment date by a day or two you'll still be paying on time. To pay the full balance, card holders can adjust their payment online. However, in the event that the card holder forgets to pay the bill, at least a portion of the balance will avoid late fees.
4. Know your rights. According to a new law passed by President Obama that should be going into effect within several months, consumers will have to be more than 60 days behind on their payments before they see a rate increase reflected on their bill. This initiative will protect consumers from spiraling credit card debt and will encourage payment in a relatively timely fashion. The new legislation also stipulates that if a card holder pays his balance within 6 months he will be eligible for a reduction to the original balance. Consumers should keep an eye on the newspaper and watch for similar laws in the future that may affect credit card payments.
5. Research cards with lower interest rates. Interest rates on credit cards fluctuate almost as dramatically as gas prices. Still, consumers who think that they are paying too much in interest can search around for cards that have lower interest rates. Of course, having a good credit report is a good way to ensure that you'll be approved for a new card, and following the steps above is a good way to ensure that you'll maintain a decent credit history.

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