Revolving credit (credit cards) has made it too easy for some card holders to spend and live outside of their income levels. The result is the average American household carrying a balance of $10,700 in credit card debt. Responsible use of credit cards begins with the card holder and him/her being aware of what he/she can realistically spend, repay in a timely manner and still remain on budget.
How can you accomplish this? We've assembled a few tips for making the process simpler:
- Establish a budget and then follow that budget exactly.
- Write down and track everything that you charge to your credit card.
- Pay off your credit card balance within the 30-day billing cycle, if you can.
- Carry a credit card balance for no longer than six months.
- If you're tempted to spend more then you've budgeted or can afford, seek out someone to help.
- Or, you're overwhelmed by the process or if you are accruing debt, ask for help from someone you trust.
- If you cannot stick to these ideas, it may be best to stick to a cash-only budget.
If you're reached a point where your card's interest rate is excessive in some cases you can work with your credit card company to obtain a lower interest rate. It's also important to keep in mind that if you're making a balance transfer to a credit card with a lower introductory interest rate, be aware that the rates are often for a temporary period of time. Usually after six to twelve months the introductory interest rate jumps considerably to meet industry averages.
If you've already accrued credit debt or are struggling to set up a credit card budget, contact your local credit union representative for credit counseling and assistance in managing your finances.