At first sight, a credit card is just a piece of plastic. Who could only knew that it can create so many problems and put people in a massive debt? Sometimes it happens that we don’t have enough money to cover our expenses so we use credit loan online opportunity and more often we put our daily costs on our credit cards. There’s one fantastic thing about credit cards – they don’t let consumers feel pain from spending their own money. Thus, you can easily lost control over your spending and once find yourself in a serious debt problem. We’ve prepared a list of situations and thoughts consumers should avoid not to lose control over their credit cards and financial life.
“I Don’t Want to See my Credit Card Bill”
If you don’t control your spending good enough, sooner or later there can come a moment when you will want to close your eyes not to see your credit card bill. There’s a simple rule which works always and for everybody: nothing concerning your finances should be a surprise for you. In other words, it’s highly important to know for sure how much money you spend, what is your balance, what is an interest rate you pay and when you should make payments on your loans and credit cards and the exact size of these payments. If you’re afraid to see your credit card bill then it’s a warning sign that you live behind your means.
“I Can Use a Balance-Transfer Offer and I’ll be OK”
Yes, most of promotion sounds good and that’s why it works. You can shuffle your debt around hoping that it will help you to pay off your debt but most consumers fail to repay the debt in time (let’s not forget that promotional funding is limited) and everything ends up with paying additional balance transfer fees and staying in debt. Don’t hurry to open new credit cards and transfer your balance from one card to another. Also it’s not worth to rely on loan consolidation offers. Keep in mind that every financial step you make has an impact on your credit and wrong move can easily harm it.
“My Credit Score Has Dropped but I Don’t Know Why”
On one hand, we need using lending tools to build a credit score because there’s no other way to prove that you’re a reliable borrower except of getting a loan and paying it off responsibly. But it’s important to know all the details of financial processes we are involved in. Thus, there’s a strong connection between your credit card balance and your credit card limit. The difference between these two figures is called credit utilization ratio. Watch this figure carefully because it should not exceed 30%. Otherwise, your credit score will start dropping and it’s easy to understand why – because you use significant part of the money available on your credit card.
That’s why, if such thoughts sound familiar to you, pay more attention to your finances and put more control to your credit cards. Limit your expenses, try to live below your means and keep in mind that you can always turn to a financial adviser or credit counseling agency to get professional advice and help on a debt management.