If you’re someone who is scared to look in your mailbox because you know that a credit card bill is awaiting you, you’re not alone. There are many published reports which indicate that the average credit card debt amount per household is somewhere around $15,600.
Luckily, there are some things that you can do to better manage the growing credit card debt that you may have. If you’d like a few tips, here are five that will help you get your finances back in order in no time.
Be aware of the fine print with all cards. One of the biggest mistakes that people make when it comes to their credit cards is not reading the fine print while applying for one. Many of them have higher interest rates that you may not be prepared to pay and it’s not uncommon for cards to have hidden fees and additional fees for late payments, as well. In short, the more you know about your credit card before using it, the better off you’ll be in the long run.
Don’t use one card to pay off another card’s balance. If you’re already have a substantial amount of credit card debt, it’s understandable that you may want to use one credit card in order to pay off another. Just remember that you’ll not only be paying the balance, but an interest fee too. For this reason, it’s better that you use cash.
Use cash more than credit. In fact, when your credit card debt has gotten a bit out of hand, the best thing to do is to stop using them altogether and instead use cash. Sure, initially it might seem like a bit of a challenge if you’re used to charging hundreds or thousands of dollars at a time. However, the thing to keep in mind about credit cards is that they are loans. For this reason, it’s best to use them for emergencies or to book reservations. It’s also wise to spend with the mindset that if you don’t have enough cash on hand to pay for something, you should wait until you do.
If you increase your limit, watch your spending. Say that you went to a credit card website like CreditCardXpo and read an article on how to manage your credit cards – especially your credit card debt. Something that it might mention is if you recently had your credit card limit increased, you should not spend more than three quarter of it. Although a hike in your limit can increase your credit score, that only works to your advantage if you pay your balances off.
Set up a payment plan. If you do find yourself feeling overwhelmed by your credit card debt, don’t close out your accounts; that can cause your score to drop. Instead, stop using your cards and contact your credit card company to set up a payment plan. By speaking with a customer service agent directly, they can help you to pay off your balance over time. For tips on how to negotiate a credit card balance, visit Nolo and put “negotiate credit card balances” in the search field.