Did you know that the average amount of credit card debt in an American household is over $16,000? That’s one of the main reasons that credit cards have become one of the worst financial problems you can face. Worse yet, the longer you wait to handle your credit card debt problem, the bigger that debt is going to become. This is why the Texas bankruptcy attorneys here at Shuster Law, PLLC want to help you get your debt under control this year.
7 Ways to Prevent Credit Card Debt from Tanking Your Finances
- Make a Budget– If you don’t know how much you’re spending, how can you know how much you can allocate toward your debt. It’s time to sit down with your monthly bills, a spreadsheet, and a calculator.
- Pay More Than the Minimum– If you only pay the minimum balance on your credit card accounts, it’ll take years for you to pay off that debt. If you really want to make an impact on how much you owe, pay more each month.
- Consolidate– Paying off several credit cards at once can wear you thin. Get a personal loan with an interest rate lower than your credit card and use that to pay off your balances. Just don’t keep using your cards after you do this. Otherwise, that loan just turns into more debt.
- Pay on Time– Penalty fees plus high-interest rate equals bad credit and more debt. Keep these penalties away from your wallet by paying on time. It helps your credit, and it helps you avoid extra charges.
- Use Reward Points– Don’t just let reward points sit in your account doing nothing. Cash-out those points and use the payout on your debt. It might not be the most efficient use of your points, but every little bit helps.
- Tax Refund– Instead of spending that tax refund on new merchandise or a vacation, why not use it to pay down some debt. It’s a smart money tip, and it gets you closer to your debt goals.
- Negotiate– Not many people do this, but you can call your credit card company and ask for a better interest rate. You can even call to ask that some of your debt be forgiven, but be warned. Calling to ask for debt forgiveness will hurt your credit report, and you will have to pay taxes on the forgiven amount.
Bankruptcy is another option you can consider if your finances get too hairy. And even though your credit may take a hit, the hit you take putting off bankruptcy could be far deeper. You can learn more about bankruptcy and keeping your finances straight by sticking to our website. Don’t forget to visit our Facebook page too.