Mitigating the Risk of Credit Card Debt
Many people find it difficult to mitigate the risk of credit card debt, but it doesn’t have to be hard. There are certain things you can do to reduce your debt and to keep from falling further into debt in the future. Of course it takes discipline and a sense of urgency in order to get the job done.
Follow these guidelines to help ease the risk of credit card debt and to manage your finances in a more responsible manner.
Impulse buying: Some shoppers find it nearly impossible to pass up on an item they see at a store and instantly want. So without a thought to their finances they buy it. That’s called impulse buying and it’s a quick way to get yourself into credit card debt. Don’t risk further debt. Before you purchase an item take a deep breath and think to yourself – “do I really need this item, and can I really afford it.” Chances are you can’t afford it because you didn’t plan on buying it.
Minimum payments: Don’t fool yourself into believing that you’re actually saving yourself money each month by only making the minimum monthly payments on your credit cards. Practicing this method of payment only puts you at risk for a larger balance because you’re rarely paying down the principal. What you’re paying off is the interest. Your credit card balance stays the same or, in some cases, grows because the interest keeps accumulating. What should take you one year to pay off could take five or six years. And if you keep charging on the card, the balance keeps growing and, consequently, you keep paying.
Number of cards: There’s no reason to have four of five credit cards. Some people carry that many and more and in the worst case scenarios, max out the majority of them. You’ll have no chance of mitigating the risk of credit card debt because the debt will keep growing. Soon you won’t be able to use the cards and you’ll be stuck paying off debt for the rest of your life.
Leave them at home: One way to ease credit card debt is to give the cards a rest. Keep them at home in a safe place and only use cash to buy the things you need. It’s surprising how much money you can save when you only use cash. That’s because it’s hard to part with your hard-earned money, but very easy to take out a card and swipe it for a quick purchase.
Author Bio– For more information, please click here- http://www.consolidatedcredit.ca/credit-card-debt/danger-signals/
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Category: Credit Cards
