Education

Tips for Managing Credit Card Debt

Your credit card balances have been creeping ever upward for some time now, and you’ve seen this movie before. You don’t want to – again – struggle to erase your balances, a stressful time-consuming task that you barely got through. The good news is that by buckling down and creating new habits, you can better handle your plastic. With that said, here are tips for managing your credit card debt.

The Issue
You’re far from alone. In fact, U.S. consumers who owe on credit cards have an average debt of $9,333. Chipping away at all that debt could impede your ability to save for college, purchase a house, save for retirement, or even handle everyday expenses.

But don’t despair. With some attitudinal and behavioral adjustments, you can get back on track and stay there.

Tips for Better Credit Card Management

Pay on Time

This is Job 1. Pay all your bills on time, all the time. Just one late payment can trigger a cascade of negative effects including a hit to your credit score plus higher interest ratesand late fees, and maybe even a reduction in your credit limit.

Control Your Spending

This is an imperative – if you’re serious about improving how you handle your plastic. No debt management strategy will make a scintilla of difference if you don’t tamp down on your spending.

The first thing you must do in this regard is create a budget so that you know how much you’re doling out and where your money’s going. You don’t need to live a life of asceticism, but you do need to practice restraint. Even if you increase your income, your debt load will rise commensurately if you have poor spending habits.

Beyond establishing a budget and sticking with it, you should:

Be smart about credit usage. If you wouldn’t be able to erase your balance within three months of a purchase, you may want to reconsider presenting your card.
Don’t be impulsive. If you can’t avoid temptation when you’re out and about, take cash and leave your cards at home.
Watch your “wants.” If your spending is getting out of hand, forego those morning coffee runs and cancel those subscriptions that you don’t even use. Perhaps you can get a less-costly cable package and limit going out to movies.
Manage grocery shopping. Clip those coupons and hold out for sales. It’s also a good idea to seek out as many store brands as possible.
Maintain your possessions. To avoid having to buy new items such as shoes or purses, use a bit more care to extend their lives. There are balms and other potions that can deter cracked leather, for instance. Stay atop of car maintenance.
Establish an emergency fund. To avoid whipping out the plastic for every unforeseen event, and adding to your debt, make sure you have at least $1,000 stashed away for car repairs and the like.
Pick a Credit Card Payoff Approach

There’s no time like the present to get out from under all that credit card debt. However, you do need a strategy. For example, in California, debt relief is a strategy that is increasingly called upon as credit card debt in the Golden state exceeds the national average.

With this approach, you hire a company such as Freedom Debt Relief to go to your creditors and see whether they would accept a one-time payment in full for less than what you owe to mark your debt as “settled.” Creditors usually go along because they know that if you file bankruptcy, they’ll get little to nothing.

You can also go with credit card consolidation, which entails rolling your high-interest debts into a single fixed payment to just one lender. If you can qualify for a better rate, this strategy streamlines bill paying, and you can save money.

You also may want to automate your credit card payments so that they come right out of your account, and you don’t have to worry about them. This tactic also keeps you from inadvertently missing a payment.

If taken to heart, these credit card debt management tips can help you get out of debtand keep you out. Don’t wait until things get too far out of hand. If you’re there already, debt relief through Freedom Debt Relief may be your best move.

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