Using a credit card to work up a huge debt is probably the
easiest thing a young adult can do. Reasons unknown, all of us feel more
comfortable handling a credit card than handling cash.
High credit card debt results in heavy and perpetual losses
until the debt is nullified, because the interest rates on credit card debt are
unusually higher than normal loans. One ends up losing more money paying
interests than that has been spent, not to mention the repercussions on credit
rating when one fails to meet up with the payments. These debt traps can
actually be used for your benefit if you follow a little prudence and the
following tips:
Keeping in mind the interest rates transfer you balances to
the lowest rate card where you might get a 0% or lowest possible rate or some
period of time. During this period you can attack your other debts that are
attracting heavy interest. Be prepared and keep track of other balance transfer
offers and get ready to repeat the process towards the end of the period on the
first offer. If you don’t find one, pay off as much as you can to reduce
burden. Due to intense competitiveness of the credit card industry, you will
always find 0% offers on the market. Always remember, the debt still exists.
Another useful and efficient tool to reduce your credit card
burden is a debt consolidation loan. These loans carry far lower rates of
interest compared to credit cards. You can take a debt consolidation loan at a
lower rate and do away with all the debt, only make sure your repayments are on
time so that you credit rating does not take any more beating.
Another way of reducing credit card debt is to exercise self
restraint. This is easier to preach than to do, but the only practical way out
of this is to slice up your cards, so that there is no induction to spend
unless you have extra money.
