Managing Credit Card Debt Without Using Up Your Savings


Having to deal with credit card debt amid the backdrop of an economy in ruins can be extremely stressful. Americans have become accustomed to buying on impulse. It’s those impulsive purchases that have manifested themselves in extremely high personal debt loads. The numbers are startling. According to, “the average credit card debt per household with credit card debt is $15,788.00.” Given the current state of the economy, trying to pay off these debts without touching one’s savings is becoming more and more difficult. Conventional wisdom once stated that one should immediately use savings to pay off as much debt as possible. The reason being was that the interest rates on savings accounts and investments are often trumped by the interest rates charged on outstanding credit card balances. Any amount earned in interest with savings investments was easily taken away by the credit card’s higher interest rates. With some credit card interest rates anywhere from 18% to 28% or more, this was a valued argument. However, not using one’s savings account to pay down debt is perhaps a better approach given our current situation. After all, there are a number of extremely important reasons to leave savings accounts alone. In fact, it’s best to continue to save as much as possible and manage credit card debt at the same time. How is this done?

Put an End to Impulse Purchases

The first phase of managing one’s credit card debt is to immediately put a stop to those impulse purchases. For some people it’s as easy as simply stopping. For others, it involves not putting themselves in situations where they’ll be tempted to buy something. In some cases it may involve ending your ability to buy on credit. Make sure to end your ability to use your credit cards. Cut them up, put them away or give them to a loved one. Regardless of how, not buying on credit is the first step to managing your credit card debt.

Get Used to Paying With Cash

Start paying for everything with cash. Don’t have the money to buy something? Don’t buy it then. It’s that simple. Get back to understanding the value of the American dollar. Money rarely changes hands these days. Everyone seems to be using credit cards for everything they buy. If you don’t want to carry cash, then start using your debit card. As long as you don’t use your credit card and don’t buy something you can’t immediately pay for. Do without those treats you may have become accustomed to buying yourself everyday. After a couple of weeks you’ll notice your disposable income increase and you’ll be able to save more or put more towards your debt.

Amalgamate Credit Card Debt with Debt Consolidation

Most Americans with credit cards typically have more than 1. In some cases it’s 3, 4, 5 or even more. Trying to pay off the minimum balance on each credit card, at different periods of the month, simply doesn’t work. It’s frustrating, time consuming and extremely problematic. Missing one payment can immediately affect someone’s credit rating. Stop the madness. Make it a point to amalgamate all your credit card debt into one monthly payment through debt consolidation. It will immediately reduce your interest rates, make it easier to pay down your debt over time and free up valuable cash. It will allow you to continue to pay off your debt and increase your savings at the same time. Debt consolidation is used by a number of people as a way to alleviate their debt, save more and set a plan in motion to one day become credit card debt free.

It’s not easy to manage credit card debt. However, making a conscious decision to stop those impulse purchases is the essential first step on your road to becoming debt free. Using cash or debit will allow you to concentrate on what you can afford to buy now. Consolidating your debt into one monthly payment will make it easier to manage your debt and allow you to put more towards your savings.

This post was written by

jason – who has written posts on Budget Clowns.
Father of three and married to a lovely women. Always looking for ways to save money, and invest it properly for my children's future.

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