Crash course to avoid credit card debts – Change your card using habits – part 1

I hope you have gone through my first post about national debt. I was trying to show you the big picture regarding what our national debt is all about. Now we can discuss about our day-to-day common problems which may become a headache for your financial future.

Today I am going to share some small but effective tips which can help you to reduce your credit card debts. Every 8 out of 10 US citizens are facing this problem since their student life. The consumer credit world has changed a lot since past decades. The banks have changed their policies regarding credit cards and acted more aggressively since the last recession. The banks will continuously trying to snatch money from consumers pocket through fees & higher interests.

So, people…especially young one’s need to know, how to manage their plastic card. They need to do it such a way which can lower the chance of getting into debts & save a lot of their bucks. Using a credit card responsibly isn’t a difficult concept. The important thing is to make it as your daily habit.

Let’s get started with the basics:

1. Micromanage credit card accounts – Financial banks & card companies are now reducing their credit limits, charging enormous fees and deactivating consumer accounts. They must give you 15 days notice that they are changing the terms & conditions. But regularly check your e-mail for their mail, don’t miss it. To be on the safer side, adjust your priorities by signing up to website of your card provider. You’ll get notifications and updates through your online account. Regularly check your accounts for any modified rules or terms. If you ever wrongly charged any fee or penalty, contact the customer relationship service and notify your grievance with proper records of on-time payments.

2. Keep a low credit balance – If you use your credit balances up to the limit often, it is not a good sign for you. It will end up with your low credit score. Because of that whenever you opt for mortgage or insurance, the interest rate and the premium will always be higher for you. It will happen even you are paying the total balance every month in full. It is better to use not more than 30% of your allotted credit, it’ll boost your credit score also. Do few more things like comparing with other card providers, stopping new purchases etc. Pay up the large balances first, It will create a difference between your available credit & due payments.

3. Look before you pay – In case of soft copy billing or online billing, things might get little complicated while making payments. Normally credit card provider companies use a system which considers 0 penalties between the statement closing date and the due date. If you consider the paperless billing system or revolving balance system, you won’t know the due date and there is a possibility that you might be skipping the little 0 penalty gap. So, when it happens, your payments will be considered as late and you’ll be liable for late charges. So, better to verify the due date each time you are going to make the payments. If you are paying by checks, make sure to get your statement as a proof. It will be considerable if you are ever charges wrongly. Think this through and give it a trial, you’ll easily achieve your goal.

4. Credit limit increment – If you see that your monthly amount of credit is nearly crossing the limit, you can ask your card provider bank for a higher limit. If you are using this card for a long time and have a goodwill with the company, it will be easier for you. But make sure that increment of your card credit limit may also trigger the possibilities that your lender or bank (in case of a mortgage) may pull the credit history. It could definitely affect your score. Don’t go for your credit limit expansion unless it is very important for your transaction or spending.

To be continued…