‘Buy now and pay later’ is every company’s USP when issuing a new credit card. And it’s all good, at least when you pay your dues back on time. The real problem begins when you fail to pay back your dues and accumulate debt; the credit card company charges hefty interest rates on arrears and damages your credit score. Let’s not forget those annoying calls or visits from debt collectors. So, here are a few pointers to help you manage and eventually clear credit card debt.

Curate a payment plan
There’s a possibility that you owe a debt on more than one credit card, which is why you should jot down all your debts and set a repayment strategy to clear off dues in time. There are many credit card debt calculators available online to help create this plan.

Pay off highest-interest-rate cards first
No two cards are the same. Each comes with different credit limits, offers and interest rates. So if you’re in a situation where you owe money on two separate cards, we recommend paying the one with the higher interest rate first. Doing so can help save on unnecessary charges in the long run.

Transfer the balance
Another way to ease credit card debt is to transfer balances from a higher interest rate card to a lower interest rate card. You may incur a balance transfer fee, but the repayment amounts might be lower. But use the option only if you can pay the debt off within the low-interest-rate window, else it’s going to be the same rodeo all over again. Such options also require good crest ratings, so do keep that in mind.

Use savings to pay off debt
Credit debt attracts exorbitant interest charges, which are drastically higher than the interest you earn on savings. So use your savings to clear off credit card debt. It helps reduce debt and does so at lower interest rates.

Pay the minimum, and some more
Credit card companies offer the option to pay a minimum payment every month (about two to three per cent of the total due) to encourage timely payments. But while paying minimum dues serves as a breather for credit card debts, it ends up costing more. Banks charge interest on the total amounts due. Therefore, the more you pay only the minimum due, the longer it takes to pay off debt, and the higher is the accrued interest to be paid off.

Ask for lower interest rates
One of the easiest ways to clear off credit card debt is to ask your creditors for lower interest rates for repayments. A good credit score or a good relationship with the credit card company can complement your request too. Bringing down the interest rates by even a point or two can significantly decrease the amount you pay, help clear debt, and save you money.

Stop using credit cards
The most crucial part about clearing off debt is not incurring it whatsoever. So it’s best to stop using your credit card for purchases at least until you clear off the arrears. But if you must use the card, do so only if necessary and with caution.

Speak to a debt advisor
It’s not always easy to clear off credit card debt, especially if there’s a lot to pay back. In such situations, we recommended speaking to a debt advisor. They can help you make the best decisions when creating strategies to pay off debt, and they may help you pay it off sooner than anticipated. Debt advisors are also entitled to maintaining confidentiality. Other than that, a debt advisor might help you identify benefits on your card that you were never aware of.