This is a guest post from Carol, one of the financial writers associated with the Credit Magic Community. ^[2] With her in-depth knowledge and vast experience, she has had a profound impact through writing and advising on all credit issues and has presented useful tips to manage credit card ^[3] debt. Her remarkable guidance and support has improved the community into a global hub for the credit related solutions

If you would like to guest post at The Wisdom Journal ^[4], drop me a line using my contact form ^[5] and we’ll talk!

You can be comfortable with credit card debts as long as you are making payments every month and making progress on the principle. The moment credit card ^[3] debts take away your peace of mind; it is a warning sign that you need to formulate a plan to manage your credit card ^[3] debt so you can avoid damaging your credit report.

Given below are some of the factors why debt due to credit card ^[3] gets out of hand.

Universal default

If one credit cardholder fails to make payments regularly, the credit card ^[3] issuer increases the rate of interest. The increase in rate of interest is also applicable for credit ^[2] cardholders who have been regular with their payments. This hike in interest rate due to another credit issuer is called Universal default. Thankfully, recent credit card legislation has addressed the problem of universal default.

Interest and penalties

You will have to pay penalties and interest if you miss any payments on your credit cards. If you fail to pay within the due date, you will be charged – bank on it. Most issuers will allow cardholders to make online payments. If yours does, set up automatic payments so you’re never late, otherwise prepare to see a lower credit score.

Fees for exceeding limits

You will have to shell out a fee for exceeding the credit limit of your card. When you accept a credit card, you are given a credit limit and you are expected to use your card only within your credit limit. The moment you use your card in excess of your limit, you’ll pay “over-limit” fees.

APR or Annual percentage rate

Annual percentage rate is the interest rate the credit card company charges you. It is at the discretion of the credit card company to increase the APR ^[6] if required, though recent credit card legislation requires a minimum notification period before raising your rate.

If you are aware of the factors that contribute to piling debts, you can take them in your stride. In addition to the above, take the following measures to manage your debts properly. It will help you to manage debts due to credit cards ^[3] to a considerable extent.

Pay more than the amount you are expected to pay each month.

This is the only way to make any progress in paying down your credit card debt. If you are paying more than the minimum amount each month, you are paying for the interest rate as well as the principal amount.

Whichever debt repayment strategy ^[7] you use, getting that burden off your shoulders is a great feeling.

About the author

Ron has written 1080 articles on The Wisdom Journal.

The founder and editor of The Wisdom Journal ^[4] in 2007, Ron has worked in banking, distribution, retail, and upper management for companies ranging in size from small startups to multi-billion dollar corporations. He graduated Suma Cum Laude from a top MBA program and currently is a partner in a national building materials company.

If you enjoyed what you just read and would like to get FREE email updates with the freshest articles from The Wisdom Journal ^[4] delivered right to your inbox, subscribe today ^[8]! It's ridiculously easy and you can unsubscribe at any time. Since your email address is never sold or abused, you can subscribe with confidence, PLUS you'll get free reports/guides/eBooks, subscriber only benefits, and other perks.

• Blog ^[4]
• Twitter ^[9]
• Facebook ^[10]