How to Manage Your Credit Card Debt

This hub is not about consolidating your debit, it is about managing a credit card to the best advantage, which is enjoying the perks you can get from a credit card without having your credit limit max'd constantly.

Having a credit card is a great idea; buying something and having 30 days to pay it. The best perk of a credit card is the 1%-5% cash, airline miles, etc. that most credit card companies pay you for using the card. But those seemingly small but $5, $20 items bought during the month did not seem like much but added up so the credit card payoff balance became unmanageable and impossible to pay off totally. Now the credit card debit on the end of the month statement carries over and with it interest charges.

Without a doubt, paying off just a portion or the minimum payment on a credit card debt statement is the not the best way to proceed because now there remains a balance and will be added to during the next month, then the next month, until so much credit card debit is accrued that paying it off isn't possible.

I have developed a method which might give you some help with your credit card debt.

A Method to Control Credit Card Debt

For this to work you need to be disciplined and use it consistently throughout the month. When you write a check or make an electronic payment you immediately subtract it from your checking account balance. Now you know how much money you have for the month after that subtraction. My method works the same, by subtracting each and every credit card transaction from your checking account balance. The money, of course, doesn't actually go out of the account, just out of your spendable balance.

To begin this method:

  • Each time you use your credit card, write the credit card debt amount where you would write in a check, listing it as a "C" rather than a check number.
  • Write in the details and dollar amount and subtract from your balance.
  • At the bottom of your checkbook register page, in that wider space provided, enter the dollar amount of the credit card debt. This becomes the balance you owe for your credit card.
  • Each time you use the credit card, add that transaction to your balance listed below.
  • At the end of the month, when your credit card statement comes, you have the credit card funds "saved" in that balance amount at the bottom of your check register.
  • When you go to pay the credit card debt amount, simply write the amount in the debt column of your register, then in the deposit column write in the amount of your credit card fund. The two amounts will be the same ideally if you have added each transaction throughout the month.
  • Now at the bottom of the check register you should cross out the amount and write in a 0, ready to start again for the next month.

This may seem complicated at first but the idea is you never are surprised with a huge bill because you have been keeping track of the credit card debt each month and are able to pay it off each time.

The actual balance in your checkbook, with the bank, would be obtained by adding your checkbook balance and your credit card fund balance together.

Below I have created a sample.  You see that your actual checkbook balance remains at $50 when you add the two balances together


Checkbook Register

Number
Date
Transaction
Payment
Deposit
Balance
Beginning Balance
 
 
 
 
$50.00
CC (for Credit Card Fund)
11/1/10
Gas
$20
 
$30.00
CC
11/2/10
Food
$5
 
$25.00
.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
At the Bottom of the Register Page:
 
 
 
 
 
$0 $20 $25....
Crossout old
$ each time
 
 
 
Bottom of Open Page of your Register will look like this: $0 $20 $25

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