Having trouble getting your credit card balances under control? If so, you're in the same boat as thousands of other consumers. Good news: Once you choose to change your spending habits, it is possible to make your debt manageable. Use these simple tips as a foothold to stop sinking deeper in dept and start regaining control of your finances. Paying Only The Minimum Balance Only sending in the minimum monthly payment means paying your bill could take ages, and the interest rates (10-29%) that credit card companies charge will keep your bill growing every month. Instead, send as large of a payment as you can afford. Whenever possible, try to reduce your spending in other areas to focus on paying off your credit card debt. This will help keep compound interest from working against you. Cash Advances Credit card companies often sends checks to cardholders in the mail. These checks are cash advances. Taking a cash advance will cause you to accrue interest the minute the advance is taken - unlike with regular credit card purchases, there is often no grace period. An automatic fee of 2-4% is also charged on the amount of the cash advance in addition to a higher interest rate compared to your regular credit card balance. Credit Card "Rewards" As long as the credit card balance is paid in full and on time each month, there is nothing wrong with using credit cards to earn rewards. But, if you can't pay off the money you spent during the month, the rewards earned from credit cards are often worth far less than the interest accrued. Credit card reward schemes often come out to a 2% bonus. Because the amount of interest charged on outstanding account balances exceeds the bonus, incurring double-digit interest amounts to a loss. Using Your Credit Card for Everyday Items Your monthly necessities should be paid with your monthly income. Keeping required purchases like groceries and utility bills off of your credit card is a major step toward getting your spending under control. A $3 gallon of milk purchased with a credit card can quickly turn into a $30 gallon of milk if you don't pay off the balance at the end of the month. There's no need to incur interest charges on necessary items that you should be covering with your paycheck. Using Your Credit Card as a Cure for Medical Bills Medical bills can be overwhelmingly expensive, especially if you're uninsured. If you're having trouble paying your medical bills, you should attempt to negotiate an agreement with your medical care provider. Don't add to your bills - and your stress - by tacking exorbitant credit card interest rates onto your medical expenses. Also consider going over your bills with a fine-toothed comb to make sure they are accurate and that you understand all of the charges. Ignoring Your Debt Ignoring your credit cards bills may seem like a temporary solution, but it's a bad idea because the interest you're paying will only cause the balance to grow. In fact, missing a payment or two may also cause the interest rate to increase. Rather than trying to hide, you should call each of your credit card providers to renegotiate the terms of your agreement in order to lower the interest rate, set up a payment plan, or even have some of your debt forgiven. Ignoring your debt can spur debt collectors into action, and with the unsavory tactics collectors are employing, you definitely don't want to be on their radar.
