Most effective ways to avoid debt on credit card.

As there is inflation and sudden increase in price of household commodities,groceries,Americans are using credit card,spending more and result in debt.

I had a chance to participate Chatzky on Hermoney podcast featured the   reasons how credit card debt grows and avoid mistakes from debt.

Credit card balances  has increased 62 billion to 987 billion  during the fourth quarter 2022  

• Due to high inflation the Americans has reduced spending  becoming more reliant on use of credit cards
• Balances has been surpassed pandemic  levels touching high interest  debt
• Paying debts ,budget revising and selection of credit cards appropriately we are in comfort zone covering expenses.

 Stop spending

Stop using of credit cards if we cannot pay debt if still continued the use of credit cards.Either keep aside or don't use.The goal is preventing from accumulating debts.Analyse how you spend that is money spending  for big purchase planned  before. After analysis if you find money is lavishly spend its time to revise budget.

Pay high interest debts

When decided get rid of debt one must look the interest rate for credit card each owned.This helps  to get rid of those credit card first whose interest rate is high  that is you can take care that  card costing more money.

Avalanche method is one method which  prioritizes  higher -interest debts with putting extra money towards expensive one and with paying minimum debt on all debts.  So we come across high interest one to be pad immediately and  move next credit card where interest rate is high.

Read :Best ways to make most of the Credit Card in 2023

Contact  your credit card issuer 

If you have a positive payment history with credit card  company  you own and you are facing  a financial difficulties , illness, etc  ask  your credit card company and try a payment plan before you miss any payment. 

Be honest on which credit cards you require

Rewards are the one factor .Always ensure such cards are really fit your financial requirements .It doesn't matter the rewards ,if we are over credit utilization limit, carrying high balance and high interest rate.

Rewards offered by these cards can have annual fees nearly 100 dollars  before we charge a cent .We don't want to spend more which we cant afford  to take benefit which is not required for us .Best starters credit card  list shows that cash back, student,small business cards does not charge annual fee.

As informed  Jean, the Creditor wants to keep the account on track and they also need to get paid. It's  their  interest to work to work with us.

It is possible to  negotiate with a creditor, from late fees and also  payment plans to lower  interest rate. Also mention the  fact that you have made  making on-time payments before  and that love to  remain as  customer.

Credit card user doesn't use card all time if it is reward card user or several cards user.He knows how to use this tool affordably and wisely.

Related :What is a Credit Card? How to choose Best Credit card in 3 steps?