As a card holder, what can you do to stay out of credit card debt? Here are 6 tips on how to handle your account the smart way:

1. Be aware of your credit card’s exact terms. How well do you understand your credit card’s Terms & Conditions? Surprisingly, many cardholders are not even aware of their exact interest charges, transaction fee costs and penalties. If you’ve had that credit card for a long time, has there been any change in your interest rate and fees? Do you take the time to read your credit card mails? Remember, your credit card company can increase your charges at anytime as long as you’re given the 15-day advance notice.

2. Ask for a lower rate. If your credit card has increased your interest rates, you can call them up, speak with the manager and ask for a lower rate. Don’t be afraid to point out the interest rates that other credit card companies offer. If you feel that you need to threaten your credit card issuer of leaving, go ahead and do so. However, it’s best to raise your issues politely and with dignity. If your credit card company refuses to give in, you can try calling them again after a month or two.

3. Maintain an excellent credit score. You’ll have more negotiating power if you have an excellent credit score. Lenders simply can’t say no to your requests, as long as they’re reasonable. If you’re applying for a new credit card, the best credit card deals often require excellent credit. If you’re asking for a lower interest rate, you can easily point out that you are one of their best customers and they can’t afford to lose you. Furthermore, a high credit score protects you from sudden increases in your rates and charges.

4. Pay off your entire balance each month. Are you in the habit of submitting just the minimum due payment? If yes, it’s about time to make some changes. Paying only the minimum increases your risk of bad debt. You’ll also end up paying for more because of the additional interest fees. On the contrary, paying off your monthly balances in full protects you from the risk of bad credit.

5. Don’t use your credit card when shopping. When shopping with your credit card, it’s more tempting to spend more. Even those few extra cents can unnecessarily add up to your expenses. The best way to cut costs is to use cash for your daily purchases. Use your credit card only for purchases that you’ve planned. Before charging anything to your card, see to it that you can afford to pay off your balances on time.

6. Never be late. Even occasional late payments can hurt your credit score. Furthermore, paying for additional late penalty charges is a waste of time. Avoid these additional expenses by submitting your payments on time. Be aware of your due dates. In case you won’t be able to make it, call your creditor in advance and explain your situation. Request if your due date can be extended without reporting it to the credit bureaus.

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Allison May is a credit consultant and a writer for Credit Creators. The resource provides consumers with valuable advice and information on credit cards for bad credit,credit cards for good credit and other credit-related issues. Its main objective is to help people build good credit. Copyright © 2008

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By Allison May

Allison May is a credit consultant and a writer for Credit Creators. The resource provides consumers with valuable advice and information on Guaranteed Approval credit cards, Unsecured credit cards for Bad Credit and other credit-related issues. The main objective here is to help people build good credit. Add Allison on

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