Getting To Grips With Your Credit Card

Are you ready to come to grips with your credit card? It is not as hard as it might appear. By taking some simple steps and being both patient and proactive, you can get a handle on your credit card debt. Once you do, you will be able to live a life of financial freedom. Pretty amazing, right?

Know What You Owe

Many folks have a vague idea as to how much they owe on their various credit cards, but that’s it. In addition, numerous people underestimate what they owe. There are two reasons this usually happens.

1. Not recording what they purchase. You probably think you will not forget what you have purchased. The truth is most of us have busy and sometimes stressful lives, so it is a very easy thing to do. Not recording what you purchase keeps you out of touch with your credit card spending.

2. Not wanting to face reality. Many folks live their lives pretending everything is fine and is going to work out. While it is good to be optimistic, it is actually harmful not to address what could wind up damaging your lifestyle and future plans. If you want to come to grips with your credit cards, you need to gather all your statements in one place and face facts.

Take Advantage of Your Free Credit Report

Consumers are entitled to one free credit report per year. Take advantage of this. Even if you are not planning a major purchase, such as a home, it is a good idea to have a copy of your credit report.

Double-check everything that is on your report. Make sure all the information is correct. You need to be especially careful if you have a common name or share a name with a parent. Many folks have found their credit report is a mixture of their credit habits and someone else’s.

If you notice any incorrect information, contact the credit bureau and ask to have it removed. You can do this on the phone, but you should also write a letter that outlines the errors and ask to have it attached to your report. Keep a copy of the letter in your important files.

How Your Credit Score Influences Your Credit Cards

If you have a good credit score, which is generally considered a score of 620 and above, it is time to take advantage of it. Call each of your credit card companies and ask them to give you a better interest rate. You will be surprised how easily this is accomplished. Credit card companies do not want to lose you as a customer, especially if you have good credit.

That is great, but what if your credit score is under 620? Do not get discouraged. By getting a handle on your credit cards and other finances, you can raise your score and enjoy the benefits.

Even if you have average or poor credit, make those phone calls and ask for a lower rate or better terms. Different credit card companies might still be willing to work with you, and it never hurts to ask. You might even find some of them are willing to forgive a certain portion of your debt. The best thing to do is to be pleasant to everyone you talk to, and to patiently explain your situation.

Time to Pay Off Your Debt

Concentrate on the credit card that has the highest interest rate. This is the one you should pay off first. Make sure you are making more than the minimum payment each month, and if you can afford it, send two payments in each month.

When you are done paying off the card with the highest interest rate, move to the next highest and do the same thing. Do this until they are all paid off. Depending on the size of your debt, this process could take years. That is why it is so important to be patient and to not give up. You will get to the end and when you do, you will be glad you stuck it out.

Managing Your Credit Cards

If you have been living on credit cards, it’s time to change. Credit cards are fine if used responsibly. That means you should be able to pay them off each month. If you can’t, you are probably living beyond your means.

It’s common to see people with five, six, even ten credit cards spilling out of their wallet or purse. Some folks think it is impressive, but in reality, it indicates poor financial management. There is actually no reason to have more than two credit cards, and that is only if one is a store or gas credit card.

Cancel all your high interest credit cards. Do not just cut them up, though. Call customer service and make sure they cancel out your account. Also, continue to monitor your credit score to make sure the account is shown as closed.

Credit Cards Are For Emergencies

Do not go back to living on credit cards. It is not worth it. You cannot ever achieve financial freedom if you are carrying balances month to month. It does take some adjustment in your living and your attitude, especially the first couple of months. But remember that no one has ever been sorry about getting a grip on their credit cards.

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