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credit card debt

Credit Card: The Best Way To Use Yours

By: Michael Millington


If you’re a working adult in America, chances are high that you own and use a credit card. Credit cards are convenient bits of money that can substitute for cash you do not have at the time. People use their credit cards for multiple purposes, from emergencies to frivolous items. Regardless of what they use their credit card for, one problem that seems to plague cardholders is their inability to pay off their credit card bill. Credit card debt is a serious matter that can easily creep up on any cardholder. Here’s the best way to utilize your credit card and avoid debt.

 

  1. Pay Off Your Monthly Credit Balances

Credit cards distinguish themselves from charge cards by giving the cardholder the ability to carry over a balance from month to month. Even though it might give you leeway to pay off your credit card balance, it can also result in balances lingering and even growing. Keeping a balance through the months will also subject the cardholder to interest fees that add to the growing amount of credit card debt.

Paying off your monthly credit card balances can help you to stop dealing with interest fees, to maintain your credit record and to keep your FICO score healthy. Consider keeping your credit usage low to have a better chance to completely pay off any balance that accumulates throughout the month. Having your credit card paid off each month will eliminate the possibility of any credit card related debt collecting.

 

  1. Be Smart With Your Spending

While it is a great practice to pay off your entire credit card balance every month, there are circumstances that may not allow the entire balance to be paid at once. In some instances, the balance might be too large to handle in one payment period. Although there are times when this instance is unavoidable, smart credit card usage can help you to evade creating that situation unnecessarily.

When not in the middle of an emergency situation, consider using credit only for small things (if you have to use credit at all). You might even benefit from creating a credit card budget. On your monthly budget, having an allotted amount of money to pay off your credit card bill can help to keep your credit spending in check. Set the limits of what you spend on your credit card by setting the limits of what you are willing to pay.

 

  1. Repay Your Credit Card As Soon As Possible

Having a card for emergency purposes only is a common practice. With that being said, there are times when you will spend more than you can pay back within one month. If this happens, enacting a payment plan to have the credit debt repaid can take the place of the one-time payment. The key to bringing your credit card balance down to nothing is to refrain from using your credit before it has been paid off.

The sooner you repay your credit card debt, the better it will be for credit rating and your credit balance. As mentioned earlier, paying off your credit card balance can eliminate the threat of paying interest fees. In addition, you will also be taking care of your FICO score by paying your credit card bill on time. While using too much of your credit can have a negative effect on your FICO score, paying it back in a timely manner can help to alleviate the balance before it has a lasting effect.

 

  1. When In Doubt, Seek Help

One major misstep that many Americans make has to do with credit card debt. Many people believe that once they fall into credit card debt there is nothing they can do to get back out. Either it feels like too much debt has accrued or it feels like you use your credit card too much to break out of the cycle. Either way, the problem will not go away until it is dealt with. It is entirely possible to seek help with your credit debt.

Seeking the help of your creditor is a reasonable solution. Making an effort to resolve your credit card debt can show your credit provider how serious you are about wanting to pay your bill off. You can try to negotiate a settlement with your credit provider so you can pay less on your credit bill. Your creditors are not obligated to negotiate with you, however.

Another way to seek settlement with your creditors is through a debt relief company. Having a professional debt relief company handling your settlement for you can put you in a much better position than trying to do it on your own. Credit card companies often take debt relief companies more seriously than a regular individual. With established relationships and proven professionals, debt relief companies have a more successful time negotiating credit card debt down.

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