Ways to manage debt and improve credit ratings
If you are anything like the vast majority of America, you have credit card debt and personal loans for bad credit, even if you have excellent credit and always manage to keep up with your bills and get them paid on time, things such as high balance credit cards with high interest rates can keep even the most credit worthy people from getting ahead, it may even affect your ability to live your life to the fullest or cause you to have to pay high interest bills rather than use that money to gain interest in a good bank account. You are certainly not alone in this struggle, in fact, most Americans have credit card debts that hold them back, regardless of their actual creditworthiness or credit score. The trick is learning to use the rules and advertised offers to your advantage. Here are fairly quick, easy, and extremely rewarding ways to help not only manage your debt, but turn your credit situation around and have your money working for you instead of you working so hard to keep already rich companies from taking advantage of you…
Balance Transfer Cards and Improving credit scores:
Use those offers to transfer your debt onto a low introductory card: This is a fairly popular way of managing credit card debt, not only will it help consolidate your payments into one lower cost bill, it will also help boost your credit rating by showing some of your other accounts as paid off, at that point you may decide to keep the cards or not, but if you do decide to use them, it’s best to keep your balance on the higher interest cards under one third of your credit limit and continue to make payments on time. If you can’t afford to do that, I would recommend closing at least some of your paid in full accounts within a month or two of transferring their balances.
This technique works well if you have at least fair credit, are looking to improve your rating, and are willing to shop around for the right balance transfer card for you–remember the new company would LOVE to have you transfer your high balances to them and will often be quite competitive with their offerings to convince people with better credit to do so, it can actually be quite win-win if you find the right company for your situation. If this isn’t an option for you, you may consider paying off one card at a time by making extra payments if possible, but absolutely more than the minimum payment on at least one card a month.
Choosing to pay off the lowest balance card first will free up some additional finances for you to add to the next lowest balance card. Conversely if you just have a couple cards with high balances, paying more on the card with the highest interest rate first makes more sense because it will be more difficult to just eliminate a payment altogether, but paying off one or two low balance cards can really affect your credit score in a way that makes getting a high balance, low intro rate, transfer card MUCH easier, not to mention you will be in a much better position to find an amazing offer that will help you pay off even high balances faster if you have a better overall credit rating and lower income to debt ratio, remember the more creditworthy you are, the better deal you can get if you shop around. When you finish paying off one card, filter that money you would have usually spent on its bill to your next card that needs to have it’s balance dropped.
If you do this faithfully every time you pay off a card, depending on how many you have, their balances, and interest rates, you could literally save hundreds in just a few months and be making MAJOR progress toward a more desirable financial situation. Finally, when deciding which cards to cancel and which to keep, consider negotiating with your oldest account for a better rate, because older accounts make you more credit worthy, it’s only worth it if they will work with you as well, after all, they are YOUR customer just as well as they are yours, negotiate, if you think you wouldn’t be very good at it or need help, there are several resources and even nonprofit companies who specialize in this sort of thing, do your homework and find a company that is flexible and familiar with several types of credit issues.