Description: Get to know how you can overpower a huge debt burden arising from your credit cards by applying certain proven techniques.
Too much credit card debt can create a lot of problems to you. When it is called as “too much”, the sense might vary and it’s dependent on the amount of credit card debts and monthly income. Credit card debt is usually regarded as excessive when it’s higher than 50% of your overall credit limit. If you’re carrying a balance for over 6 months and didn’t make any payment to pay down the principal, it is also considered as excessive credit card debt. Only you can understand when your credit card debts are getting beyond control. It’s always difficult to recover from such a situation. The most effective technique to save yourself from debt is to use established strategies to handle your debts and expenses:
Handle your credit limits carefully
At present, banks have become stringent regarding credit limits. If you have a good credit score, you might qualify for a big credit limit. However, you must not accept it. If you think you might spend excessively, mention the highest limit you would prefer on your card. You can restrict your spending to $1,500 by making $1,500 the credit limit on your card. However, to maintain a good credit score, you mustn’t carry a balance of over 30% of your credit limit.
Cut down the number of cards
Don’t request for too many cards. This might put you into a very big debt trap. Nowadays, each grocery store, departmental store and airline offers a credit card. This doesn’t imply you’d go for all of them. Select your cards based on the services that you feel are essential for you. Take into account the pros and cons of using a store card instead of your usual bank card. You should only request for a card if the advantages are substantial and affordably achievable.
Make a budget and commit to that
Regulating your spending is also a proven technique to tackle credit card debts. A good guideline for budgeting is to begin with your monthly income after taxes. Divide it by two. Deduct your rent or mortgage, utilities, car payment and any other fixed expenses like child support or student loans. How much is remaining? This is the figure you can afford every month to pay down your debts. Control your debt so that the payments can be financed with this amount. Take down this budget. Discuss about it with your close friend or a family member. Surveys demonstrate that through writing your budget and discussing it with others you would become more responsible.
Look for debt management solutions
If you have too much debt, you might need to look for solutions to manage it properly. These might include debt management or consolidation. These solutions can simplify your budget so that you can get back on track.
Once you pay off your loan obligations, use the above techniques to prevent becoming indebted once again in future.
