How to pay off large credit card debt charged to multiple cards

Do get organized

Having multiple credit cards can be confusing and overwhelming. You should get organized to understand your monthly payments inside and out. Keep all credit card bills and documentation in one place. Put it all in a folder for mail correspondence, or an email folder for online statements. You can also create a spreadsheet to keep track of your card accounts, the monthly payments, and the dates each payment is due.

Do make your payments on time

Once you’re organized, this will be a bit easier. Always make at least your minimum credit card payments by the time they’re due. Otherwise, making smaller payments or paying late can severely damage your credit score in the long run. If you’re having trouble making your payments, call your credit card company (or companies).

Do negotiate

Your credit card companies may be willing to negotiate a more flexible payment plan, a lower interest rate, or some other attractive terms. However, they won’t take it upon themselves to do so. You will need to call them to see if you can negotiate a better situation for yourself.

Do consider consolidating your debt

Many banks and credit unions can extend loans to consolidate credit card debt, all in one place, and at an attractive interest rate. This is helpful for two reasons: First, you will only have to keep track of one payment per month, rather than several. Second, you could potentially save money with a better interest rate. You can start off by talking to your bank to see if they offer an option like this.

Do put to use the “snowball effect”

The deeper you are in credit card debt, the harder it will be and the longer it will take to get out. But you can do it, if you commit yourself and hang in there. As you eliminate one debt after another, you will have more money to dedicate to the remaining debt. This is called the “snowball” effect. Results will be hard to see at first, but if you keep at it, you will eventually see your debt disappear. If the process becomes overwhelming, or you’re unsure of what to do next, don’t be afraid to consult with a trusted financial planner or credit expert who can help.

Do not close your cards immediately

Let’s say you’ve managed to pay off one of your more troublesome credit cards, and your balance is now zero. Congratulations! Now don’t close it. Unless you can’t trust yourself with a credit card, it’s a better idea to keep the card open. Sounds counterintuitive, right?

This is because of the impact your “utilization ratio”—or the amount of credit you owe divided by your combined overall credit limit—has upon your credit scores. Closing a credit card will lower that ratio, meaning that you appear more “maxed out” and, therefore, present a higher risk to prospective lenders.

Do not spread yourself thin

If your goal is to pay off your credit card debt, it’s better to concentrate on one card at a time. You could prioritize by paying off the highest-interest card first, or you could pay off the lowest balance first. Continue to make the minimum payments on all other cards, but put a larger amount towards the card you’re concentrating on paying off.

Do not only pay the minimum

Putting more than your minimum payment towards your credit cards on a monthly basis may be easier said than done, but only paying the minimum across all your credit cards is not the most effective way to pay down your debt. Paying extra towards your debt each month will reduce the amount of time it takes to pay off your obligations, and you may then drastically reduce the amount of money you’re paying in interest.

Do not get discouraged or give up

If you have a lot of credit card debt, paying it down may be a long term commitment. Do not give up, though. There is light at the end of this tunnel, and there are several ways to make the process manageable.