Economic uncertainty often lends itself to people trying to make ends meet by opening up new lines of credit. Unfortunately, many people end up way over their heads and eventually owe more money than they can reasonably pay back. It’s important to learn how to manage credit card debt, and here are five solid tips:
1. It’s important to understand your spending by taking notes where your money is going. Many people are often shocked by the magnitude of what they owe, but that’s why it’s important to come up with a spending budget. Your budget shouldn’t surpass what you make each month.
2. Stick to your budget and don’t allow yourself to frivolously spend your money. The problem is that many times, all people see is a piece of plastic. Try using cash next time you go shopping and you’ll automatically spend less.
3. Try negotiating a lower interest rate for your credit cards. A polite phone call and a request are all that may be required of you to get better rates. Your credit score does play a role in your interest rates, but it never hurts to ask.
4. Come up with a payoff strategy for your cards. You can start by paying off the card with the lowest minimum balance or choosing to use the one with the highest limit to pay off other remaining balances.
5. Set goals for your spending in order to avoid racking up debt. By knowing where you need your money and what you can spend on miscellaneous things helps rein in debt.
Getting out of credit card debt requires quite a bit of due diligence on your part. Make sure you come up with a game plan and don’t max out your credit limit.