How To Cut Down On Debt
Practice Safe Credit Usage
If you are thinking about getting a credit card, you should understand how to use it. Getting too out of control with you credit usage will result in bankruptcy, debt and a cycle where you get even further behind. Your credit score is a great thing when used wisely, but not so great when you treat it like free money.
How Many Credit Cards Should I Have
You should have as few lines of credit as possible. Have one card that you use for emergencies, and have possibly one other card that you use, and then pay off, each month. This is a good balance between having credit available, and not going overboard. As long as you have some credit balances out, and you can pay them off, that should help your credit score and allow you to qualify for loans in the future.
How Do I Lower My Balances
If you do have too much credit debt, there are some easy ways you can cut down on that debt. Being able to get ahead of, and stay ahead, of your debt is essential, but if you find that your debt is getting out of control, take these steps:
You can transfer your balance from one credit card to a lower interest credit card. The lower interest will cut down on your monthly payment.
You call your creditor and explain that a situation has come up, or you cannot keep paying the current balance for much longer. If you can make one payment to clear the debt, it will be a lower balance and you can get out of jail (almost) free. Learn other ways you can save up to 500 dollars each month.
This is where a third party will negotiate your debt balances with your creditors. Get lower interest, lower payments and other benefits. Please note that this is hard on your credit score, almost as bad as bankruptcy in some cases.
Other Tips On Credit
-If you cannot stop using your cards, just get rid of them. Tear them up and then work on paying off the balances. Once the balance is paid off, you can get another copy of your card, assuming that you feel it is under control again.
-Don't ignore your credit card debt. Doing so only makes the situation worse and can land you in hot water with a lot of people. Remember that a missed payment can raise your APR to almost 30 percent interest.
-Younger people should avoid high credit limits. It might seem fun to have a free pass to do whatever you want, but unless you have the money to make payments, it is advised that you stay away.