Managing Credit Card Debt ---
The average home in Ohio and across the country that carries any kind of credit card debt owes $15,762, according to a report from Nerd Wallet. Unlike debt like a mortgage or car loan, credit card debt can be detrimental to someone's credit score.
Keeping that in mind, it is imperative that people know how to manage having a credit card. Here are six tips to using those accounts wisely:
1. Know your credit score. Before opening a credit card or taking on any other loan, for that matter, it is imperative that consumers know what their credit score is. As the Federal Trade Commission points out, people may gain access to their credit score for free once every year. There are also sites that permit consumers to pay for a score, and there are even credit cards that grant free access to that information. The reason this is so important is that interest rates are often based on the cardholder's credit score.
2. Set your own due date. Many credit card companies will permit a cardholder to set the due date he or she wishes. This can be advantageous, as it may work to set the date apart from the date that rent or mortgage is due. Or, some people find they prefer to have a due date close to payday every month.
3. Manage the balance wisely. One factor that determines someone's credit score is whether or not a card has been maxed out. Experts suggest keeping the balance on a card between 20 and 30 percent of the actual limit. Even if the balance can be paid off in full, maxing out a card every month can be detrimental.
4. Never carry a balance. The only time interest is charged on an account is when someone cannot pay off the balance in full and on time. Interest rates can be shockingly high, adding a significant amount of money to the next month's bill. Consumers should adjust their budget to ensure they can bring the credit card balance to zero every month. Failing to do so could result in revolving, overwhelming debt that creates severe financial turmoil.
5. Communicate with the card company. It is entirely possible to make a mistake and miss a payment. If someone has a good history with the card company, it is possible to get late fees waived. According to a poll from CreditCards.com, eighty-nine percent of people who were charged a late fee but asked for reprieve were granted it.
6. Know what to do about debt. There are countless people across the country who have credit card debt. It is possible to find a card with an appealing balance transfer option. This enables a consumer to move debt from one card with a high interest rate to another card at a better rate, possibly even a 0 percent rate for a certain period of time.
People with serious credit card and other debt may also want to explore the option of filing for bankruptcy. Anyone who has questions regarding that issue should speak with an attorney.
We can help you with your debt or bankruptcy questions at Bailey & Gunderson Co., L.P.A., with offices in Norwood, Western Hills and Anderson Township. Phone: (513) 631-0022.