 TITLE: How to Pay Down Credit Cards on a Tight Budget CONTENT: Strategies for Paying Off Your Debt\n-----------------------------------\nFinally, it's time to start making serious progress on your debt. Consider these potential strategies:\n*   **Debt avalanche** **method**: If you carry balances on multiple credit cards, find out the interest rate for each card and make bigger payments to the account with the highest rate first. Make sure to pay at least the minimum due on all your accounts to avoid late payments. Once the highest-balance card is paid off, you can move on to the card with the next-highest interest rate and repeat the process. Doing this can lead to substantial interest savings.\n*   **Debt snowball** **method**: Perhaps your balances with the highest interest rates are also the largest. It could take a long time to make what feels like real progress on your debt when you're paying only a little extra per month. That's where the debt snowball comes in: Using this method, you'll pay off your smallest balances first, rather than the ones with the highest rates. You won't save as much money on interest (though the difference could be minimal), but you may feel more motivated as you see your individual debts disappear.\n*   **Debt management plan**: As you plan to pay off debt, it's a smart idea to set up a free consultation with a certified credit counselor at a reputable nonprofit organization. A credit counselor will look at your debt and budget picture and suggest strategies that may help you. One of these strategies is a debt management plan, under which the credit counselor will negotiate with your creditors to potentially get you a lower interest rate or monthly payment. You'll pay the credit counseling agency each month, and the agency will pay your creditors. The plan comes with a fee, and you'll have to close the credit cards included in the plan, so it may not be best for everyone.\nKeep Track of Progress and Stay Motivated\n-----------------------------------------\nAs with any goal, keeping track of your progress is key to understanding where you stand in the process and how much further you have to go. You might use a spreadsheet or keep a note on your phone to track the following for each credit card account:\n*   Your remaining account balance\n*   Payment due dates\n*   Payments you've made\n*   Your interest rate\n*   Annual fees\nSeeing this information in one place for all your accounts will help you understand which debt to tackle first. It will also help you see your progress over time, which can help you stay enthusiastic on what might be a long journey.\nIf you have multiple cards, make sure to pay close attention to the due dates so you avoid missing any payments. Payment history is an important factor in your credit scores, and even one late or missed payment can cause them to drop.\nTo get a clear view of all your debt, regularly monitor your credit report and credit scores to see your up-to-date account information as creditors report it. You'll also be able to see if your credit scores change over time and track your debt paydown progress.  \nLearn How to Use Credit Responsibly in the Future\n-------------------------------------------------\nThe journey isn't over once your debt is gone. After you've accomplished that, your new goal will be to prevent debt from accumulating again. But since you have more tools and a greater understanding of debt to draw from, you're more likely to use credit cards responsibly. Here's how:\n*   Check your credit report regularly, even when you're debt-free. With an improved credit score, it becomes vitally important to protect it from issues like inaccurately reported payments or identity theft. You can ensure you're safe from these concerns by keeping an eye on the accounts listed in your credit report.\n*   Avoid relying on your credit cards for nonessential purchases. Make sure you can pay off whatever you spend on your cards every month to avoid paying interest charges.\n*   Prioritize building an emergency fund, which is an account with cash you've saved to cover unexpected expenses—so you don't have to rely on credit cards. Experts recommend you have at least three to six months' worth of expenses set aside to cover unforeseen financial needs, but even one month's savings is a good start.\nUsing Credit After Paying Off Debt\n----------------------------------\nIt's important to remember that once you're out of credit card debt, you can go back to using your credit cards—but with caution. Using a credit card for purchases can have many benefits, including travel rewards and purchase protection.\nAs long as you bring your balance back to zero every month, credit cards can offer plenty of savings and perks. Let your experience paying off credit card balances remind you of how hard you worked to be debt-free, and motivate you to stay that way. END