Credit Card Debt Management Tips

Many of us did not learn how to budget in college or from our parents. This vital life lesson is a rude awakening, and some Millennials may never fully be able to do it without professional help. It involves discipline and, for some, the retraining of your brain, a proper attitude towards money, and good habits. We are shaped by our upbringing. Our parents most likely play the most prominent role in how we treat money throughout our lives. These lessons can be learned directly by parents helping to manage money, or indirectly by seeing how your parents handle money firsthand while growing up. To change, you need to recognize and acknowledge where you currently stand and where you want to be. Take a moment to truly reflect on this before continuing. Once you’re ready, read on to learn about credit card debt management tips.


I owned a credit card in high school. The credit card was strictly for gas and food, and my dad watched the card like a hawk. If I ever purchased outside of those two approved needs, I had to pay using my cash savings. I earned my cash savings from mowing lawns, shoveling snow, and birthdays. My father always paid the credit card on time, leading to me building a credit score for myself. At the time, I did not care or realize the significance of a credit score.

On the flip side, I have an uncle who racked up credit card debt. It was always mind-boggling to me knowing he had credit card debt, yet he never seemed eager to pay it off on time. My uncle’s flawed approach lasted for years and continues today. He doesn’t seem to mind or care as he always wants the newest and best technology, splurging on gifts for himself or others. My parents would talk about his reckless habits with me, and I am glad they did. I was able to learn and understand the importance of managing debt.

Seeing how my parents and uncle treated credit cards, I concluded that I never wanted to be in credit card debt. Having the latest and greatest gadget and spending money I could not afford was not the route I wanted to take. The amount of interest being paid on my uncle’s credit and his continuous use of the card kept him in credit card debt. By being in debt, you pay someone else hundreds to thousands of dollars over time to buy something you cannot afford. This money you pay in interest is money you could spend on yourself or savings/retirement. This strategy could shed years off how long you have to work to retire comfortably. Whether he likes it or not, the best thing for my uncle is to shred the credit card and create a monthly budget around eliminating the credit card debt.


In college, I had income from a summer job. My father passed the responsibility of making credit card payments to me, but still had full access to view my spending habits. You would think I would use the credit card for everything, but this was in 2008 before digital payments took off. I only used the credit card for paying for gas at the pump because it was convenient. Otherwise, cash was king for me. When I ran out of funds at the end of my freshman year, I said goodbye to splurging on entertainment and snacks.

Fast forward nearly a decade later, and smartphones, online banking, and digital payments are the new way of life. People can now make credit card payments using Venmo, PayPal, and Apple Pay. When I was young, my father only used his credit card for gas and occasionally to pay for meals at restaurants. My father now uses his credit card for nearly everything! However, unlike my uncle, he never spends more than he can afford.

Credit cards also offer great perks with money-back incentives for use on every purchase. Using my credit card for everyday purchases, I gather hundreds of dollars in cash back rewards each year. Like my father, I use my credit card as if it were a debit card. I pay the balance off nearly every day from my banking application. Making daily payments allows me to view my cash balance, which is my budget for the month.


Pros of Using a Credit Card

  • Cashback rewards
  • No need to carry cash (stolen cash is easier for a thief to get away with opposed to a credit card or smartphone, which may not even be accessible)
  • Temporary emergency-use for essentials, if needed
  • Can help you build your credit score if used properly

Cons of Using a Credit Card

  • Very high-interest payments if not paid on time
  • If not disciplined with money, it can easily lead to you spending money you do not have, leading to credit card debt
  • Need to be on high alert for credit card fraud
  • Can ruin your credit score if not appropriately treated and payments are not made on time

4 Tips For Handling Your Credit Card

I am by no means an expert on credit cards, but I can assure you that I have never taken on credit card debt, nor do I plan to. The interest charged is astronomical, and I never want to put myself in that position. Here are some tips for managing your credit card:


Only spend what you have in your bank account, and no more. This approach also means setting and knowing your budget.


Know your essential costs for the month and put this into a separate account. As earnings come into your bank account, know what your essential costs are. Essential costs can include personal loans, insurance, rent, or mortgage. These costs can also include transportation, utilities, real estate tax (if you own a home), and more. Calculate what these costs come out to monthly. Set this amount aside each month into a separate account. Do not use this set-aside money.


I log onto my bank account every morning and pay off my credit card balance every day. Doing this allows me to see my bank account’s cash balance and gives me an idea of how much money I have remaining. I use the remaining funds for food, fun, and entertainment. With daily credit checks, I am constantly aware of my cash balance and dramatically lower my risk of fraud. I would potentially catch any sign of fraud instantly and begin working with my bank to freeze the card or issue a new one.


If you need a credit card for an emergency, try to either work on a monthly payment plan or go into a “money-crunch” mode. If there is an outstanding balance on your credit card that will take a while to pay off, you should also go into a “money-crunch” mode. Stop eating out, find free entertainment options, or temporarily reduce your 401(k) contribution. Try to crunch your budget until you’re back in the black or green. Reduce and avoid credit card debt at all costs. I view any interest paid on my credit card as money thrown away or burned.

6 Tips For Creating a Credit Card Debt Management Plan

Being free of credit card debt means the freedom to do more with your hard-earned money. Credit cards are not for everyone, and that is okay. If you find yourself unable to get your head above water with credit card debt, you may need to stop using your credit card altogether. Adding to existing credit card debt with an astronomical interest rate will make it more challenging to get out of that debt. Credit cards charge a very high interest when not paid off on time, between 15% to 29%! Here are some tips for managing your credit card debt:


Click here to learn about the safe way to cancel a credit card.


Option 1: Snowball Effect

Pay the minimum balance on all credit cards/debts and eliminate the smallest credit card balance first. Psychologically, this reduces the number of credit cards you have to worry about and allows for progress to be easily seen!

Option 2: Avalanche Effect

The other option is to pay the smallest balance on all credit cards. Find out which credit cards have the highest interest rates and pay those off first. While you will not receive the satisfaction of eliminating one of the credit cards in its entirety quickly, it will save you the most money in the end.


Begin creating a monthly budget and list your credit card payments (more than the minimum) as one of the essentials you need to pay off every month.


Using cash in your wallet will keep you more honest with your budget. If you don’t have cash for the purchase, it is time to go into starvation mode and either cut costs or find a side hustle.


Live below your means until the credit card debt is eliminated. This means no eating out and no unnecessary purchases. Reduce credit card debt at all costs. I cannot stress this enough. Money paid in interest on a credit card is money burned, thrown away, and gone forever.



In the early days, my father kept me on track. Have someone assist as a coach or mentor. A coach or mentor can provide many benefits. You may not want to let them down. They can also be someone you celebrate with when you reach a set goal or milestone in eliminating your credit card debt.

Credit cards can provide great perks and rewards; however, they need to be used very carefully! Credit cards are not for everyone and, at most, should be a last resort. Learning to manage money better and setting a budget for yourself is one of the best things you can teach yourself. No excuses. You are never too old to learn and try something new. Motivate yourself to take action now and secure your financial well-being.

If you have any questions regarding your investment options in regards to saving and building wealth for your future, please contact Midland Trust at (239) 333-1032 or visit We would be happy to discuss our services with you and how you could incorporate self-directed IRAs into your investment portfolio.

Author: Andy Anger, Client Services Senior Associate at Midland IRA, Inc.

MIDLAND TRUST IS NOT A FIDUCIARY: Midland’s role as the custodian of self-directed retirement accounts is non-discretionary and administrative in nature. The account holder or authorized representative must direct all investment transactions and choose the account’s investment(s). Midland has no responsibility or involvement in selecting or evaluating any investment. Nothing contained herein shall be construed as investment, legal, tax, or financial advice or as a guarantee, endorsement, or certification of any investments.

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