Oops — I Maxed Out My Credit Cards. Now What?

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Credit cards are simple and convenient, but they can also get you into trouble. Admittedly, I am a former victim. But as we increasingly go paperless in many aspects of life, many of us rely on debit and credit cards when buying everything from gas to groceries. Plus, credit cards can also help build your credit history. However, if you're using credit cards on a regular basis and not paying off your bill in full every month, your balance can grow and you might max out your accounts. Then what?

Maxed-out credit cards often indicate a spending problem or financial strain, so it's no surprise a high balance can lower your credit score. Fortunately, if you immediately address the issue and adjust your spending, you can knock down those balances and improve your credit rating. Here are a few tips to get back on track when you max out a card.

1. Don't Apply for More Credit

Learning that your credit cards are maxed out doesn't mean you should apply for a new credit card. You must learn to use credit responsibly, or else you'll just dig a deeper hole for yourself. If you apply for a new credit card, there's a pretty good chance that you'll also max out the new account. You'll double your financial trouble and add more debt than you can possibly handle. Who needs that? Definitely not you.

2. Make Your Payments Every Month

Maxing out your credit cards can trigger higher minimum payments, and there's the risk of default if you can't afford the higher amount. Additionally, missing or sending late payments can damage your credit score and create problems with your creditors. The bank can charge late fees, raise your interest rate, or take legal action to collect what's owed. Make at least the minimum payment by the due date, and if you're going to be late, ask your creditor for an extension. (See also: 13 Things You Don't Know About Your Credit Report — But Should)

3. Stop Using the Credit Card

Some people have a cycle of maxing out their credit cards, making a small payment, and then continuing to use the card. It doesn't make sense to make a payment just so you can re-charge the same amount. This cycle keeps you stuck, and your debt won't go away anytime soon. You have to stop using the credit card — bottom line. Cut it up or place it in a card shredder. Have fun destroying it beyond recognition. At least this way, you can make headway with each payment and eventually pay off the balance. (See also: 13 Simple Ways to Avoid Spending)

4. Negotiate Your Interest Rate

If you have a good payment record, you might be able to negotiate a lower interest rate, despite the fact that you've maxed out the account. Getting a lower interest rate is one of the best ways to pay off a high credit card balance sooner. You'll pay less interest each month and have a lower minimum payment. The trick, however, is to make higher payments, so that more of your money goes toward reducing the principal balance and decreasing what you owe faster.

5. Transfer Your Balance to Another Credit Card

If your credit card company won't budge on the interest rate, see if you qualify for a credit card with a 0% introductory rate. These cards typically offer zero interest on balance transfers and purchases for the first 12 to 18 months. You can transfer your existing balance and make higher payments during this period to pay off the card. However, this strategy can only work if you don't accumulate new debt. After transferring your balance to the new credit card, get rid of the old credit card to avoid any temptation. (See also: When to Do a Balance Transfer to Pay Off Credit Card Debt)

6. Find Extra Money in Your Budget

Getting out of credit card debt is one of the toughest financial challenges many people face. Some people accumulate credit card debt because they didn't have enough income and they lived off plastic. Since paying off debt requires some amount of disposable income, you might need to put on your thinking cap and brainstorm ways to earn extra money. Where can you cut back? Cancel your gym membership, get rid of cable, only shop when necessary, don't eat out as much, look for a part-time job, or talk to your employer about overtime.

There are plenty of ways to find extra money when you're in a bind, and I've detailed pretty much all of them over the past few years in previous posts on Wise Bread. A quick search of the site will yield plenty of practical results that you can institute today. (See also: Unusual Ideas to Save an Extra $100 a Month)

Have you ever maxed out your credit cards? How did you get back on track? Let us know in comments below.

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