FINANCIAL FRIDAY: Ways to Manage Credit Card Debt
HUNTSVILLE, Ala. (WAFF) - Credit cards offer great advantages such as access to funds in case of an emergency, protection against loss due to theft or fraud, and reward programs that offer cash back. But, it’s also easy to overspend or supplement credit limits for actual income, especially during rising costs, but at a high-interest rate.
WAFF talked to an expert from Redstone Federal Credit Union, April James, about ways to manage credit card debt:
- Have a budget and monitor your charges: Credit cards should not be used to finance an unaffordable lifestyle. Limit impulsive spending and try not to spend more than 30% of your credit limit. Not only does this help your credit score, but it can also help with managing debt and lowering your minimum monthly payments.
- Transfer Credit Card debt to zero percent balance transfer cards: While enjoying the zero percent rate, make double payments to pay down your debt
- Consolidate your debt into a personal loan: This will likely offer you a better interest rate than your current credit card loan.
- Pay off your balance each month: Most credit cards have a grace period after charges are made before interest begins to accrue. By paying off your statement balance you can eliminate a large interest charge that will ultimately increase your balance.
- Opt for credit cards that offer rewards: By paying off your balance each month and receiving rewards, you will actually profit from using your credit card.
- Bottom Line: Credit cards have advantages and disadvantages. Choosing the right credit card and using it properly will ultimately help you to control your credit card debt so that it doesn’t control you.
For more ways to save, be sure to tune in at noon every Friday for WAFF 48′s “Financial Friday” segment.
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