What is the favorite method of borrowing by U.S household owners? Well, you just need to look at the Survey of Consumer Finances of 2013 that regretfully puts average household credit card debt at $15,609. However, that’s not all; the total credit card debt by May 2015 stands at $884.8 billion an increase of 2.6% from 2014.
Impact of the Economic Doldrums
With the economy still reeling from the 2007/2008 recession, it is most likely that your personal finances are also facing some flak due to such debts. Luckily, the hackneyed maxim that necessity is the mother of all inventions holds water in this case.
Wiggling Out of Credit Card Debt
It is now time to take a journey out of your debt rut through your credit cards. So, with so much gloom on the economic front, is there any respite for household owners? Here are some tested and proven ideas you can use:
1. Set Realistic Goals
Any time you have cards in your pocket, there is proclivity for impulse buying. As such, your cards should only be for a set amount of purchases. For instance, you can limit your purchases say to anything below $3,000 and stick to the plan. The reason such a plan will save you from debt is the fact that your mind is primed to pay larger bills while forgetting the rest.
2. Pay More than Amounts Owed
A report on U.S Money argues that card companies love it when you pay the irresistible minimum rates. This assures them of accrued interests when you have to clear the debt before your card maxes. Sticking to the minimum set amount just adds to your overall household debt, which might eventually bring you into the bad books of Credit Card Bureaus.
3. Be Cautious with Balance Debt Consolidation
If there is one thing that entices every consumer, it has to be the 0% or low APR on balance transfer on cards. It is an alluring offer which you might jump at but without a careful cost analysis then you will be staring at financial ruin. As such, examine the limited introductory offer available and evaluate whether you will have cleared your debts.
4. Pay Your Balances in Full and on Time
It is the simplest rule in the book yet the most ignored. If you owe money on your card, then make sure you pay it on time to avoid accruing late payment fines. Every single day you delay leads to penalties and even jacking up of your interest rates. This information will also land you in trouble with the credit bureau and consequently affect your credit score.
5. Limit those Alluring Rewards Cards
They are the craze these days and at a glance, they clearly make sense. However, you need to be overly careful when signing up in case you want more than one. These cards require you to earn points and to offset any rewards they come with higher rates. Consequently, signing up for more than one card becomes unviable in the long run.
There are many other creative ways of getting out of financial rut concerning credit card doubt. For instance, ensure you seek professional help and read up even more on the same.