How to Manage Credit Card Debt

If you own a credit card, you are probably familiar credit card debt.   Credit card debt is the #1 reason consumers are forced to file for bankruptcy. Do you own a credit card? If yes, this article present tips on how to manage credit card debt more effectively. Considering these suggestions can help you get the most out of your credit card and avoid the risk of bad credit.

Pay off your balance. There really is no good reason to carry a balance in your account. Carrying a balance from month to month will not help you get a better credit score. On the contrary, the risk of debt build-up is increased each time you leave your charges unpaid. The best way to use a credit card is to pay the monthly balance in full so you can completely avoid interest rate charges.

Pay more than the monthly minimum. Credit cardholders can pay only the monthly minimum required by their issuer. However, charges can quickly accumulate if you choose to leave them unpaid. If you cannot pay your full balance, you should pay off as much as you can from your charges.

Do not max out your credit limit. Be careful not to use your credit limit to the full. This can be avoided by checking your balance first before going out to shop with your credit card and by planning your purchases in advance.

Even if your credit card offers a low rate, you should still keep your charges minimal. Why is this important? 30% of your credit score is based on credit utilization. If you have a high credit-to-debt ratio, your credit score can badly drop. According to financial experts, cardholders should avoid using more than 30% of their available limit.

 

Simplify your life.If you have been used to extravagant spending, confident that you can always count on your credit cards, perhaps it’s about time to take an objective look on your financial situation. Are you able to pay your credit card balances in full and on time? Or are you struggling to keep up with repayment? If you’re having a hard time catching up with your debts, perhaps you need to make some adjustments or charges.

Review the fine print. If you are still in searching for a credit card, take the time to read the fine print. The only way you can compare credit cards accurately is to understand the complete Terms and Conditions. Even if you’ve had your credit card for years, you should still review the Terms and Conditions from time to time.

There might have been some changes on the terms or the interest rate might have increased, and the only way you can be alerted is if you read notices sent by your issuer. According the new Credit CARD Law, credit card companies should give their customers a 45-day advanced noticed before implementing changes.

Don’t get more cards than you can handle. It can be tempting sometimes to sign up for a new credit card even if you already have one. However, it’s best to stick with just one or two credit cards since managing multiple accounts can prove to be difficult. Don’t apply for a new credit card unless you really need to.

 

About the Author:

Suzy Vanstrusen is a credit analyst and a writer on the website EZCreditRepairSolutions.com. She has been providing consumers with tips and wise information about credit repair as well as helping you out more with your bad credit loans.  Copyright © 2011

 

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One comment

  1. This blog post is excellent probably because of how well the subject was developped. I like some of the comments too though I would prefer we all stay on the suject in order add value to the subject!

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