Do you have problems with bad credit?If so, then you’re not alone.Statistics show that an average American family owes $7,000 to $10,000 on their credit cards.
In fact, 90% of Americans spend their earnings paying their creditors.Is there a way to solve bad credit problem?
Consider these top 10 ways on how you can get out of bad credit.
1) Set a monthly budget. The key to getting out of bad credit is budgeting. Learning how to stick on a budget will help you use your monthly income wisely. Allocate your monthly income in advance to make sure that all your utility bills will be paid, your needs are met and that your debts are paid of.
2) Cut back on your expenses. Stop and think about your monthly expenses and carefully consider which of these expenses can be totally ripped off from your budget list. If you find it difficult to keep up with your debts, perhaps you’ve been spending too much than what your budget allows. It’s about time to cut back on your monthly expenses. For instance, cut back on your electricity use, long distance calls, or subscribe for a lower cable plan. Instead of eating out in restaurants for lunch each day, why not bring your own homemade sandwich or lunch kit?
3) Transfer your debts to a lower rate credit card. Another way to get out of debt more easily is to transfer your debts from a high-interest credit card to a credit card with a lower interest. You can even find credit cards that offer 0% APR for six months to twelve months, depending on the credit card company. Just make sure that you check all other rates associated with the card before signing up and transferring your balances. A low interest credit card will enable you to pay off your debts more easily without the interest. Do your best to pay off your balances completely before the 0% introductory offer expires.
4) Don’t use your credit card unless absolutely necessary. Using credit cards can easily become a habit. However, using credit cards to shop can easily lead to uncontrolled spending. Always remember that credit cards can impose high interest and penalties into your account if you fail to pay it back on time. Thus, think ten times before using your credit card for purchase.
5) One or two credit cards should be enough. Some people incorrectly think that owning a lot of credit cards can improve their credit report. However, the number of credit cards you have will not determine your credit standing. Instead, your credit will depend upon how well you maintain the credit cards you own.
6) Don’t take cash advances on your debit card. Some credit cards double as debit cards where you can take cash advances from an ATM. Keep in mind that a debit card will instantly charge you with interest right after you took the cash.
7) Regularly check your billing statement. Keep yourself up to date with your debts and your payment due dates. If your credit card allows you to access your account online, take advantage of this opportunity. If not, make sure that your bank sends you your monthly statement of account regularly. If you do not receive a statement of account on time, notify your bank immediately.
8.) Watch out for the Big Sale Trap. True, shopping during a sale can save you a great deal but if you’re not careful, it could lead to unnecessary spending. If you’re already having problem keeping up with your debts, you should be extra conscious about where your money is spent.
9) Be determined to make changes. Getting out of debt will require your will and determination. If you see some aspects in your lifestyle that needs change, don’t think that it will be so easy. Nevertheless, be prepared to do everything that’s necessary to get your financial management back on track.
10) Seek Professional Help. For some people, personal budgeting doesn’t work anymore. If you have trouble controlling your spending habits, don’t be afraid to seek professional help. There are reputable credit counseling organizations who can provide you with trustworthy credit counselor to help you manage your finances and get out of debt more effectively. Check on the background and reputation of the company to make sure that you’ll be working with the right credit counselor.