Six Ways to Tackle Your Maxed-Out Credit Cards


If you’ve overused your credit cards and maxed out one (or more), it’s time to get back on track: Maxed-out credit cards hurt you financially for many reasons. Not only are your cards rendered useless when they’re maxed out, but your utilization ratio – a key factor in calculating your credit score – will catapult, substantially damaging your score. 

Fortunately, you have options. Here are six ways to deal with those maxed out cards and to get yourself back on track.

#1: Assess your Debt

Quite simply, you can’t tackle your debt if you don’t know what you owe. A critical first step is to figure out exactly what you owe and on which cards. Once you know where you stand you can plan how to pay the debt down.

#2: Set a Budget

Set a budget for yourself and stick to it. When you are trying to tackle your maxed-out debt, the best place to begin is to cut back on your own spending. Save as much as you can and cut out any extras, at least until you have paid down your cards and brought yourself back to a place where you are able to pay your balance, in full, every month.

#3: Make your Minimum Payments – and More

When in doubt, at least continue to make your monthly minimum payments on all of your credit cards so that your credit score does not take a hit. If you can, funnel any additional money you acquire into your debt principal, starting with the card with the highest interest rate. 

#4: Stop using your Cards – all of Them!

Stop using all of your credit cards. Yes, all of them. If you’re accustomed to running up charges, it will be tempting to reach for your cards regularly. However, if your spending is out of control, you will likely end up maxing-out an additional card while you should be focusing on paying the balance (or at least lowering the amount owed) on your current debt.

#5: Consider Transferring your Balances

If you have good credit, you might qualify for a balance transfer to a new credit card with a lower interest rate, which could help you pay off your existing debt faster. However, beware steep transfer fees, and make sure that your interest rates will not skyrocket after the initial 0-interest promotional period expires. 

#6: Consolidate your Credit Cards

Finally, consider whether credit card consolidation might be a feasible option for you. If you have maxed-out more than one card or carry debt across multiple cards, reach out to a debt relief company to learn about your debt consolidation options. If you qualify, you might be able to apply for an unsecured loan at a lower interest rate, which you can then use to pay off your existing debt.  

If you find yourself up to your elbows in credit card debt, don’t panic. Using these six tactics, you can work your way to financial freedom – one good financial decision at a time.