Credit card debt is becoming a serious problems as the US economy starts to slow down. In 2007, average household credit card debt is estimated at $ 9,840, which is nearly three times that in 1990.
Accumulation of debt is mainly caused by poor financial decision and bad spending habits. Here are few tips that you can use to manage your credit card debt and prevent you from getting deer into the red.
1) Plan and Prioritize
Make plans ahead on what you want to purchase with your credit card. This should include how you intend to pay back the credit card bill. Prioritize what you need over what you want.
Without it contributions to your need, do not plan to do installation payment using the minimum payment feature to finance the purchase. Purchasing big-ticket items that you do not really need is a sure fire way to get into debt fast.
2) Stay Within Your Limit
Try to spend less than seventy percent of your credit limit. Do not take the risk of pushing your purchase to the limit, especially if your credit limit is very high. If you go over the limit, you will be slapped with a penalty fee, which is unnecessary expense.
3) Review Your Statement of account
Always check your credit card statement when you receive it. There may be erroneous or fraudulent charges. If there is, report to your bank immediately. You should also keep a record of all your credit card transactions for future reference.
4) Improve your personal finance management knowledge
You should start learning how to manage your personal finance as early as possible. Do not wait till you are in debt. There are many books written on this subject. Visit your bookstore or Amazon and check them out. Read at least one book on personal finance management each month.
Besides improving your financial knowledge, you will also gain a deficit insight on how to manage money and grow wealth. At the same time, cultivate good money habit such as saving and investing.
Always remember to buy what you can afford. Keep a record of your spending for each and every month. Analyze your spending pattern at the end of the month. You may be amazed to find that there are many small and irrelevant purchases, which likely make up a major portion of your monthly expenditure. Remember, you have control over what you spend.