As a result of the recent recession, credit card delinquency rates in the United States are at an all time high. d.
So how do you go about getting a grip on your finances to ensure that you overcome these difficult times without accruing a lot of debt on your credit cards?
Then first step is to collect all your credit cards and write down the balances that you’re currently carrying on them along with the interest rate that is applicable on each. Now see if you are carrying most of your balance on low interest rate credit cards. This is important to ensure so that if you need to revolve, you do it on the lowest interest rate credit card.
If you’re carrying a balance on high interest credit cards, then get those balances transferred onto another card. Many credit card companies offer to take on additional balances from other cards and also offer you a low interest on balance transfers. It’s a good idea to shop around and determine which card is offering you the lowest interest on balance transfers and for how long. Ensure that you are aware of the expiry of the promotional offer and what the interest rate would be once the offer has expired.
It is also important to understand all the fees that are associated with your card. Late fee, annual fee, bounced check fee, lost card replacement fee etc. all eat into your funds. The credit card market is quite competitive and if you put in some research, you would be able to minimize such fees by choosing the right cards.
Another thing you should never forget is that credit cards are highly prone to misuse. If you share your credit card details with someone you don’t trust, then you face the threat of credit card fraud. Frauds are quite common in this industry, especially online, and you should be careful about handling the card to prevent misuse.
Using a credit card is risky, and no matter how confident you may be of handling your debt, it is always a good idea to pay for things with cash. Remember that if you have to use your card to pay for something, it simply means you cannot afford it right now.