How to Manage Your Credit Cards and Debt Responsibly
Thursday, January 14, 2021, 6:00 PM | Leave Comment
Debt is a major concern for many people. In 2019, a major consumer credit company conducted a study and discovered that the average American citizen carries more than $90,000 in arrears from sources such as credit cards, personal loans, and other miscellaneous avenues.
That said, if not properly addressed, neglecting your debt could have serious financial consequences for a long time. Here are a few ideas about how you can start turning the ship around.
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Credit Cards
Arguably, credit card accounts are amongst the leading sources of debt people incur. A 2018 survey performed by the United States Federal Reserve found that American households, on average, hold roughly $6,000 in credit card balances.
However, adhering to specific management tips might keep such circumstances at bay.
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Use Cards Wisely
Many segments of society are governed by materialism and instant gratification where people are typically judged by their possessions and how expensive said products are.
This often inspires individuals to spend beyond their means and run up exorbitant credit card bills. One simple to understand but difficult to execute principle is to resists such temptations and use credit accounts only when needed.
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Enroll in Accounts With Lower interest Rates
When shopping around for credit cards, consumers are implored to try and enroll in accounts with reduced interest rates. Cards with higher rates continue to add on to the principal balance and render paying down debt quickly or efficiently quite challenging.
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Pay Bills on Time
Whenever possible, account holders must pay bills by the company established due date. Failing to perform said action will only result in additional charges like late fees or increased minimum monthly payment requirements.
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Remit More Than Minimum Required Payment
Paying only the required minimum does little to bring down hefty balances. Again, wherever, and whenever possible, cardholders should remit as far over the minimum as their budget affords.
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Personal Loans
In addition to credit cards, personal loans significantly contribute to the current debt crisis. Individuals often take-out loans for a variety of reasons such as the financing purchases like vehicles or homes and to cover higher education expenses for themselves or their children.
Holders might be able to prevent these remittances from becoming burdensome by following the preceding tips, in addition to engaging in consolidation. Those holding numerous personal loans can consider taking out a larger loan to consolidate these financial obligations into one manageable monthly payment.
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Miscellaneous Suggestions
Aside from effectively managing credit cards and personal loans, individuals could prevent debt accumulation and enhance their overall financial standing by practicing miscellaneous suggestions such as monitoring credit scores, formulating an expense budget, establishing an emergency fund, and seeking the help of financial professionals when circumstances warrant.
Getting into debt can be easy. However, emerging from such financial constraints is plausible provided the impacted individual shows the commitment and creates a viable plan.
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