Here are a few simple ways to manage your credit card debt
On behalf of Ellett Law Offices , P.C. posted in 1. Credit Card Debt on Friday, April 20, 2012
When it comes to credit card debt, it doesn’t matter if you are in Phoenix, Arizona or freezing Antarctica (well, maybe a credit card isn’t really necessary that far south)– having good habits can keep your credit score up and keep harassing creditors at bay. So what are some effective ways to manage your credit card debt? Paying more than the minimum balance is a good start.
It is something that many people are guilty of, but it can cause you headaches down the road. Letting your debt hang around by only paying the minimum affects your interest rate and can even damage your credit score. Worse yet, imagine you pay $50 for some shoes with your credit card. According to a financial author in the source article, paying the minimum essentially doubles the price of those shoes, especially if your interest rate is in the “high teens or above.”
Another step you can take to keep your credit score high and your debt to a minimum is to pay your bills on time. It is easy to let things drag on longer than they should, but that creates trouble in the future. By getting in a rhythm of paying your bills when they are due, you free yourself of late fees or fines (and interest on top of those penalties), nor will you negatively affect your credit score. If you pay late, your credit card company could jack the interest rates up on you, making it more difficult to pay off your debt.
Your credit score will also suffer from late bill payments. The same financial author says that when you pay your credit card bills counts for 35% of your credit score. “One small thing — being late — mucks up a third of your credit score,” the author said.
A couple of other strategies with credit cards are don’t get too many (it can and probably will drop your credit score) and don’t cancel them all at the same time (it leaves you without a line of credit and can stifle your attempts at securing a card down the line).
Source: Fox Business, “Seven Worst Credit Card Habits,” Karen Haywood Queen, April 11, 2012
Tags: credit card debt, credit score