In this still shaky economy, millions of Californians have found themselves struggling to keep up with their monthly expenses. Some have turned to credit cards to make up this spending gap while they look for ways to bring in more income.
Relying on credit cards, though, can be a very dangerous proposition. It doesn’t take long for the balance to grow so large that even the minimum payments become unmanageable. Add in late payment fees and escalating interest rates, and it is not too hard to see how this situation leads so many Californians into bankruptcy.
This is not to say that credit cards cannot be helpful. To a certain extent, they are a fact of life, and they can be an important tool for bridging the gaps during hard financial times. However, it is important to use credit cards wisely. Consider some of the following tips to help yourself stay out of trouble:
- Don’t get too many: Even though the offers that come in the mail might look tempting, most people don’t need more than one or two cards. The more you have, the more opportunities there will be to get into trouble. Plus, having multiple open accounts (even if you don’t carry a balance) can spell trouble for your credit score.
- Understand the terms: Make sure you understand how your interest rate works (both introductory and long-term rates) and read the fine print in your credit agreement. Understanding what could happen will help you avoid unexpected charges and rate increases.
- Pay as much as you can: You need to at least make the minimum payment every month. But just doing this is a recipe for long-lasting debt. Ideally, you should pay your balance in full every month. If you can’t, then pay as much as you can reasonably afford.
Following these tips will help you manage your debt, even in hard times.
Source: CreditCards.com, “10 worst credit card mistakes,” Kay Bell.
Our law firm helps people in California file for bankruptcy. For more information, please visit our website.