Credit cards are simple and convenient, but they can also get you into a lot of trouble. I certainly say it because I am a victim.
We are increasingly trying that many aspects of our lives do not involve the use of various papers, this is because many of us depend on credit and debit cards when we want to buy from gasoline, to groceries. In addition to that, credit cards can help improve your credit history with your bank for future reference. However, if you are using your credit cards on a regular basis and do not pay your entire bill at the end of each month, the balance may grow and you may lose benefits when you want to increase your account limit. And after that?
Stretching the credit card limit usually indicates an expense problem or a financial restriction, so it is not surprising that a high balance on it can lower your credit limit score. Fortunately, if you immediately address the problem and adjust your expenses, you can tear down those balances and improve your credit score. Here are some tips to get back on the right track when you stretch your credit card limit.
Don’t try to get more credit
Something that anyone should know when credit cards are exceeded, is that a new credit card should not be requested. You must learn to use them responsibly, or else it will continue to sink into a deeper hole. If you request a new credit card, there is a good chance that you will also credit this new account. Now you will have twice as many financial problems and add more debts that you cannot handle. Who needs this? Definitely not you.
Make your monthly payments
Stretching your credit cards over the account can generate an increase in minimum payments and there is a risk of default if you cannot afford the higher amount that comes later. In addition, failure to send overdue payments can damage your credit reputation and create problems with your creditors. The bank can charge you default interest, raise your interest rate or take legal action to collect the debt. Make at least the minimum payment on the due date and if you are going to make it late, ask your creditor for an extension.
Don’t use the credit card anymore
Some people have a cycle when it comes to using their credit cards over the account, then they make a small payment and finally continue using the card. It makes no sense to make a payment if you will then spend the same amount again. This cycle keeps him trapped and his debt will not disappear soon. You must stop using the credit card. Cut it or place it in the trash. Have fun destroying it until it is unrecognizable. At least in this way, you can progress with each payment and finally pay the final balance.
Negotiate your interest rate
If you have a good payment history, you might be able to negotiate a lower interest rate if your expenses are exceeded over the account. Obtaining a lower interest rate is one of the best ways to pay a high credit card balance before. You will pay less interest each month and have a lower minimum payment. However, the trick is to make every time you can pay higher, so that most of your money goes to reducing the principal balance and decreasing what you owe faster.
Transfer your credit card balance to another card
If your credit card company did not flinch with the interest rate, see if you qualify for a credit card with an introductory rate of 0%. These cards usually offer a low interest rate on balance transfers and purchases during the first 12 or 18 months with that card. You can transfer your current balance and make more payments during this period to pay the card. However, this strategy can only work if it does not accumulate new debts. After transferring your balance to the new credit card, get rid of the old credit card to avoid any temptation.
Try to have extra money in your budget
Getting out of your credit card debt is one of the most difficult financial challenges that many people face. Some people accumulate debts on their credit cards since they did not have enough income and lived only from plastic. Paying a debt requires a certain amount of rent availability, you may need to think hard and have to brainstorm what other ways to earn money there are. Where can you cut expenses? Canceling your gym membership, getting rid of the cable, buy only when necessary, don’t eat as much junk food, find a part-time job or talk to your employer about overtime.