How do I Choose the Best Credit Card Repayment Plan?

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  • Written By: Jessica Ellis
  • Edited By: Bronwyn Harris
  • Images By: Kreative Photography, Nyul, Tan Kian Khoon, Philip Taylor
  • Last Modified Date: 08 February 2020
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A credit card repayment plan is a method of reducing and paying off credit card debt. Choosing the right credit card repayment plan may depend on the available offers, amount that can be paid off, and status of account. It is generally best to choose a credit card repayment that will reduce the balance as fast as possible to avoid paying more total due to interest accumulation.

Credit cards are a common and even necessary tool of financial management. Many people keep credit cards for emergency situations where there may not be enough liquid assets to handle a large purchase, such as an out-of-pocket medical bill. Some people use them to gain valuable rewards, paying off the bill at the end of each month. It is all too easy, however, to rack up enormous credit card bills through negligence or a series of emergencies and be left with no way of making the minimum payments. If debt is becoming overwhelming, it may be time to consider a credit card repayment plan.

The first rule of any repayment plan is to stop spending. A balance will never be reduced if the card is still being used for purchases. Hide or destroy the card if necessary until accounts are back under control.


A typical credit card repayment plan will require a monthly payment of a minimum amount. If this amount is too high, contact the credit card company and discuss options. Many credit card companies will allow lower payments that extend over a longer period of time, such as 30 years instead of ten. Be aware, however, that interest will accrue over time and raise the total debt over the years. Consider going to an extended credit card repayment plan until the money situation improves, then switching back to standard repayments.

Debt consolidation is often an excellent type of credit card repayment plan. This allows a debtor to take out one low interest loan that in effect buys out all other debts. The debtor can then make payments to just one place, making accounting easier. Consolidation firms may also be able to discount the amount of the loan if the debtor may go bankrupt, on the theory that getting some of the money from a poor debtor is better than getting no repayments from a bankrupt person. Another advantage to consolidation is that it often has more favorable interest rates than other creditors.

When all else fails, discuss the situation with the creditor or bank. Banks need to retain customers and do not wan to risk losing repayments due to bankruptcy of a client. In general, they may try to work out a credit card repayment plan that can be managed by a person who has gotten in over his or her head in debt.



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