A credit card debt needs to be managed properly because if not checked, it can turn out to be a chronic financial problem, which you struggle with for many years. Credit cards debt burden can increase when you fail to make payments are required. Missed payments can attract high interest rates, which can climb up to 36 percent. If you are handling multiple cards, you may discover that they attract different interest rates depending on how you have managed the debts, and the defaults you have made, or the agreement put forward during the credit borrowing.

One of the prime aspects that borrowers should focus on in 2016 is to reduce their credit balances. However, you need to have the right strategy to achieve this because there are different ways you can succeed in bringing down the debt burden. Consolidating your debts with a zero percent balance transfer is a good option if you can clear the balance within the intro period.

There are cards running promotions for up to 18 months intro rates of 0 percent. You can take advantage of these cards and spread your debt over those months. However, you have to make sure that you do not fail to clear the balance because thereafter the intro period, you may be subjected to higher interest rates than the average.

Besides, if you opt to apply for another card before the intro promotional period expires, then you need to remember that a credit check will harm your score by reducing it with some points. You can also reduce your debt without consolidation. This is achieved by paying off the card starting with the one with highest interest rates. Often, consumers make a mistake by paying off the card with the smallest balance first not taking into account the interest rates.

When you are repaying your debts, the interest rates should be the guiding factor. If you have different accounts with varying interest rates and balances, the best strategy you can use to start reducing the debts is to make the minimum payment on all the cards, but for the card with the highest interest rate, you make as much as you can afford.

Every month, you should make minimum payments for all cards except the one with the highest interest rate where you make much more payment than that of the other cards. When you clear the debt of the card with the highest rate, you now focus on the card with the next highest interest rate. Using this approach, you start clearing your debt from the card, which holds highest interest rates until you finish with the one with the smallest interest rate.

But this is not what happens with many consumers. They tend to pay off the cards with smaller balances without considering the interest rates. This kind of approach gives a physiological boost, which makes the consumer feel contented, but on the other hand, it jeopardizes the consumer’s ability to settle the debts burden. The consumer feels happy when he or she strikes off one debt from the list not knowing that the compounding interest effect is harming the debt with high interest rates.