How to Reduce Credit Card Debt Without Closing Them Out

There is a great deal of information, and misinformation, available about credit cards and how to properly manage them. Some people believe that the best thing to do is to pay off your credit cards and then cancel them. According to AOL Money & Finance, that is not a good idea. To strengthen your credit you need to have open accounts that are not maximized and have a long history of on-time payments. If you are looking to raise your credit score, then one of the worst things you can do is cancel your credit cards as you pay them off. You should also avoid paying them off completely as carrying a small balance at all times also helps your credit.

Instructions

Using Your Credit Cards to Your Advantage

1

Arrange your credit cards in order based on due date. If you have two cards with the same due date then put the card with the highest interest rate first.

2

Create a monthly budget on a piece of paper each month listing all of your credit card bills, when they are due, what their interest rate is and how much is due each month.

3

Make at least your minimum monthly payments each month, and pay a little extra to the cards with the highest interest rates.

4

Avoid using any cards that are close to being maxed out. If a card is almost maxed out then pay extra on it until the balance is down to only 90 percent of the maximum limit.

5

Pay your credit cards on time. This will help avoid late charges and penalties that can add up. You will also start to accrue interest on late payments if you let them sit. Paying on time also increases your credit rating.

6

Start using the cards that are close to being paid off, or only pay the minimum balance and do not pay any extra. It is always a good idea to carry some sort of balance on your credit cards at all times to strengthen your credit rating.