Debt Management Tips - How To Better Manage Your Credit Card Debt

With interest rates and consumer spending on the rise and as salaries are not raising

in line with inflation, more and more consumers find it necessary to use their credit cards to meet expenses and for other purchase items. According to the American Bankers Association, the average American family carries approximately $8000 in credit card debts.

For many consumers using credit cards is unavoidable and the following tips can help you to manage your credit card debt wisely.

0% Balance Transfer:

Be on the lookout for 0% APR balance transfer deals with a minimum introductory period of 12 months. Ideally there should be 0% APR on new purchases as well so you can avoid paying interest on your old and new purchases. This option should be used to pay off the balance and not just to defer paying your existing debt.

There is often a balance transfer fee attached and depending on the value of the balance being transferred, this fee could be quite high, so you would need to calculate how much you would actually save by transferring your balance to the new credit card.

Use cash as much as possible:

As more and more merchants provide credit card facilities, it is becoming much easier for you to pay by card rather than by cash. You use your card and make a mental note to transfer the cash at a later date, but more often than not, you find other uses for the cash and end up retaining the debt on your credit card. To avoid this extra debt, use cash to pay for your purchases. If the purchase is not absolutely necessary then hold out until the cash is available.

Be aware of the additional fees:

When you pay your credit card bill late, go over the limit or use it to withdraw cash, you would have to pay separate fees for each transaction. If you were to do all three in one month, you could be charged an extra $40 at least, depending on the rates of your credit card provider.

Save while you spend:

There are a number of credit cards available that allow you to save in direct proportion to your spending. It is a new twist to rebate cards. Instead of the rebates going back to you, it is invested directly into your savings account which is attached to the credit card account. Obviously the more you spend the more you would save, but this also means you would have a lot more debt to repay, so you still need to spend wisely. The account gives you a nice reward based on what you spend but you are not encouraged to use this method as your only means of saving.

Make smart financial resolutions:

To manage your credit card debt you must make a decisive decision to do so, this would involve, spending on only the things you really need and deferring pleasure items until a later date. Watch your debts carefully and make a plan to save and reduce your debts at the same time. Your debt does not have to control you.

Debt Management Tips - How To Better Manage Your Credit Card Debt

By: Caleb Byron

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