1. Pay the higher interest cards first – If you have incurred debts on your multiple credit cards, then you should pay back the debts on your higher interest cards first while making the minimum payment on the rest. This is because, the higher the interest on a debt is, the more amount of payment you have to make. Thus it is better to pay off the higher interest first so that your amount of debt payment decreases and you are able to save a considerable amount of money in the long run.

2. Use at the most three credit cards – Since one of the major reasons for you incurring debts is excessive usage of credit cards, it is better that you put an end to it. If you have too many credit cards, most often you tend to lose a track of which one you are spending when and how much balances you are mounting up. As a result, it is advisable that you reduce the number of credit cards you are using so that you can keep a track on what you are spending.

3. Try using cash as much as possible – Not only should you reduce the number of your credit cards; you should reduce the usage of it also. You should use cash instead. If you use cash, then you won’t be able to carry too much money around and as a result you won’t end up buying more or unnecessary stuff. In this way your expenditure will reduce.

Thus you can see three ways in which you can manage your debts. The mentioned methods will not only help you to cut down your current expenditure and reduce your debts but also help you to not incur new debts.

It is not always easy to pay off debt. There are certain steps you should take to help decide if it is a reasonable expectation to pay it all off.

Step #1: List all of your credit cards, including your outstanding balance, your interest rate, and the minimum payment percentage and the minimum payment according to your latest statement. Do this, despite the pain it may cause as you see all the numbers in black and white. This is the first step to gaining control of your finances and getting your credit back on track, and it is absolutely necessary.

Step #2: Add up the minimum payments for all of your cards. This means if you have five credit cards, what minimum balance do you owe on each and what is the total of your minimum balances?

Step #3: Create a budget. Yep, this is a scary concept, but a budget will tell you exactly what you have to spend each month and how much you have available to pay off your credit card balances.

To determine if you’re able to pay off debt with your current financial conditions, list the total minimum balance of all your credit cards as a regular monthly expense. When you’ve completed your budget, do you have enough left over to tackle paying off the credit card with the highest interest rate? This means paying the monthly minimum which is already figured in your expenses and paying more money on top of that amount. The more you can pay off, the better.

If the answer is that you don’t have enough to pay extra on your highest credit card account your next option is to consider refinancing your home or taking out a home equity loan. This means you’re borrowing against the equity of your home and thereby reducing the amount of your home that you actually own. You can also open up a home equity line of credit. The benefit to doing this is that your interest rate is going to be much less than what your credit cards are charging you. The downside is that you will own less of your home and that there are always fees associated with borrowing money. Also, if you don’t cut up your credit cards but you continue to use them, then you’re simply increasing your debt.

So while there are obvious benefits to this type of debt solution, there are also some drawbacks, and a home equity loan or refinancing shouldn’t be a decision that you make lightly.