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Credit card debt management

Dealing with credit card debt may be easier than you think. Planning and perseverance are key, as is knowing how your debt factors into your overall financial health. When paying down your debt, some actions help more than others, but every step you take toward managing credit card debt is a step in the right direction. Here’s what you need to know.

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Credit card debt management

The responsible road

Pay a bit more

Paying more than the minimum can help you become debt-free a lot faster and ultimately lessen the amount you owe.

Pay on time, every time

Regular payments help you work toward eliminating debt and show that you are responsible with credit.

Transfer your balance

Transferring your balance to a card with a lower APR can help you save on interest in the long term, but be sure to look into transfer fees.

Watch your wallet

If you don’t need something, don’t buy it. Plan for big-ticket items and stick to your everyday budget.

The debt ditch

Pay the bare minimum

Paying the minimum may make your debt seem more manageable in the short term, but the less you pay now, the longer it takes to pay off, and the more you pay
in interest.

Make late payments

Late payments can hurt your credit score. Plus, missing payments can lead to fees and penalties and may even raise your interest rate.

Ignore the terms

Pay attention to rate increases and other conditions of your card agreement so you’re not surprised by interest rate changes or fees.

Shop till you drop

Maxing out your card may cause your interest rates to increase and affect your credit.

Two essentials to consider:

What “paying the minimum” means

Paying more can lead to significant savings. For example, if you have a $5,000 balance on a card with 13% interest, you could save more than $4,000 in interest by paying a fixed $175 a month, instead of the minimum:


Minimum payment*

Higher payment

Payment amount

$100 (first month)


Years to repay



Total interest



*Assumes minimum payment as 2%

Source: Bankrate

What happens to your credit

Keeping your credit score high makes it cheaper to borrow. But maxing out your cards or ignoring payments can hurt your score. Here’s how:*


Potential effect on a 680 score

Potential effect on a 780 score

Maxed-out card

10–30 point decrease

25–45 point decrease

30-day late payment

60–80 point decrease

90–110 point decrease

*Assumes certain conditions
Source: FICO®

Take action

Make payments manageable

Managing credit card debt starts with incorporating that debt into a workable budget. The National Foundation for Credit Counseling (NFCC) recommends that your personal debt, excluding mortgage or rent, not exceed 20% of your monthly income.

Create a plan

If payments are out of control or you just feel overwhelmed, you might want to work with a credit counselor. The NFCC is a good resource.

Find a card for you

Find a card that meets your needs and lifestyle. Some cards give you cash back on everyday expenses, such as gas and groceries, while others can help you earn toward larger purchases, such as travel and electronics.

FICO is a registered trademark of Fair Isaac Corporation in the United States and other countries.

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The material provided on this website is for informational use only and is not intended for financial or investment advice. Bank of America Corporation and/or its affiliates assume no liability for any loss or damage resulting from one’s reliance on the material provided. Please also note that such material is not updated regularly and that some of the information may not therefore be current. Consult with your own financial professional when making decisions regarding your financial or investment management. ©2023 Bank of America Corporation.

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