Practicing Self-Control

The availability of credit is often too much of a temptation for some folks – and they tend to overspend – and then are heartsick when their statement arrives in the mail at the end of the billing cycle. A good rule of thumb is to charge only those items that you can afford to pay for either in full once your statement arrives or within a period of two or three statements. Charging only those purchases that you can afford helps to build up your borrowing reputation and shows that you know how to manage credit by borrowing and paying back. As an added bonus, you won’t be racking up excessive debt that you may be paying on for years to come.

Don’t Max Out Your Credit Cards

Use only a small portion of your available credit in order to add valuable points to your credit score. Maxing out your available credit does not demonstrate responsible borrowing behavior. In the eyes of your potential lenders, maxing out your credit card often finds you challenged to repay. Stay below fifty percent of your available credit, but aim for being below thirty percent.

Avoid Multiple Cards

The more credit cards that you own, the more likely you are to overspend or indulge your love of shopping. Limit yourself to just a few cards at one time.

Consider Paying the Bulk of Your Balance Each Month

If you are following the rule of buying only what you can afford, you might consider paying off the bulk of your balance in full each month, leaving no more than one-third of your available credit limit as a balance due. Paying off the bulk of your balance each month shows that you are reliable and can be trusted to repay what you have borrowed. Always pay on time, each and every time that a payment is due. Carrying a balance will not harm your credit as long as you are making at least your minimum monthly payment on your credit card each month, and paying as much as you can on the balance above the minimum.

How Balance Transfers Work

When you do a balance transfer of your credit card debt, it involves taking the current balance that you owe one credit card company, and transferring it over to a new card. The most obvious advantage of taking a balance transfer is to save money by transferring a balance that is accruing higher interest to a card that is offering a lower interest rate, or APR. For instance, if your existing credit card has an interest rate of 12.99%, and you receive an offer to do a credit card balance transfer to a card that has an APR of just 3.99% or even a zero percent interest card, then you would definitely save on the interest that is tacked onto your account balance each month. You can transfer balances from more than one account onto a new credit card, and many of them will also let you transfer balances from department store cards as well. So, in a nutshell, that’s how you can save a significant amount of cash.

Other Advantages of Transferring Your Balances

Besides the potential savings that you can realize from doing a credit card balance transfer, you can also benefit from having all of your credit card debt transferred over to one card. This allows you to get a better picture of your overall debt and streamlines the monthly payment process because you would only be paying one lender each month.

Finding the Right Balance Transfer Offer

Wading through the sea of available credit card balance transfer offers can be a daunting experience because there are so many banks out there looking to lure consumers in. Many credit card balance transfer offers may look good at first glance, but the fine print may tell an altogether different story. Make sure that you read all the details about what you are being offered before you accept the card. You should look for a card that offers you the following benefits when you do a balance transfer:

• Low (optimally zero percent) APR. Make sure that the introductory rate that you are offered is valid for an extended period of time – at least a year. After that, know what the APR will revert to and make sure it is a rate that is more competitive than your existing card.
• No annual fee. You don’t want to negate the savings of doing a balance transfer by paying an annual fee. Many cards have no annual fee, while some may charge $250 or more right off the bat when you take out a card.
• Minimal or no fees for transferring the balance over to the new account.

Be sure to review more than one balance transfer offer before committing to a particular card. Stiff competition between credit card issuers means that even though one deal seems “sweet”, you may click around on the Web and find an even sweeter deal with another company.

Often times, credit card debt gets out of control, becoming difficult to manage. One thing is certain: those who get into it end up paying the consequences for their actions. Improper credit card debt management leads to a slew of minor and major problems in every step that you may take in the future, whether it is buying a car with a loan or getting a loan approved to buy a home. You can prevent yourself from getting into this slump by managing your finances. But if you’ve already gotten into debt, there are a few ways in which you can get out of it.

First and foremost, once you have realized that your credit card bill has gone too high, STOP SPENDING! Don’t buy anything and everything just for the sake of buying. If you genuinely need something, buy it using cash, not the credit card. Start by filing all your credit card bills, analyzing them, checking all the different accounts, and making note of the minimum payments due on each. Once you have gathered all the amounts, take a look at all your incoming funds and calculate how much and how frequently you can manage to make you credit card debt payments after removing all your usual expenses (keeping them as minimal as possible and sticking to them).

Another great tactic to make paying off your debt easier is to look for 0% credit card balance transfer offers. If your credit rating isn’t too damaged you may be able to quality for new credit with a very low (or even zero) interest rate, allowing more of what you pay each month to be taken off your principal balance. When you have a high interest rate and you only pay the minimum each month your payments are barely scratching the surface of your debt.

See to it that you make the payments regularly, giving more priority to your personal loans (including credit card loans), and maintain a good credit history from here on out. This will make it easier to get loans approved in future when it is really important. When all is said and done, you must always be cautious when using your credit card. Think thrice before every purchase you make and always remember one thing – the more you delay your credit card debt payments, the more you end up paying!