3 reasons you might want to cut down on your credit card debt and solutions

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Whatcom Credit Restoration
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3 Reasons You Might Want To Cut Down On Your
Credit Card Debt And Solutions

• If youre in a position where you cant pay off
  your credit card debt, then getting out of it
  should be one of your top priorities. Some people
  love credit cards and never seem to get in over
  their heads, always paying the bills on time and
  in full and living happily ever after with their
  plastic in hand. But not everyone feels this way
  about credit cards, and many people find
  themselves in an uncomfortable situation because
  of it.
• If youre one of these people or just want to
  get out of debt faster, you might consider
  cutting down on your credit card use. There are
  several reasons why you might want to do this,
  but these three should be enough to get you
  started.

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Downsides of Credit Card Debt

• One of the main downsides of having a lot of
  credit card debt is that it might affect your
  credit score, which will make it harder for you
  to obtain other forms of financing. For example,
  having a high amount of credit card debt could
  make it more difficult for you to obtain a
  mortgage or an auto loan. Depending on how much
  money you owe, managing your credit card debt can
  be especially hard during certain periods in
  lifesuch as when youre trying to save up enough
  money for a down payment or avoid bankruptcy.
  Those who are struggling with unmanageable levels
  of credit card debt should consider speaking with
  a lawyer about getting their debts discharged
  through bankruptcy court.

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1. It's Costly

• Its true If you use credit cards, you can get
  rewards or cash backbut that doesnt mean they
  dont come with a cost. According to The Motley
  Fool, carrying a balance can set you back 2,400
  in interest each year. Plus, it could lower your
  credit score over time and affect your ability to
  apply for loans and lines of credit in the
  future. For many people, it makes sense to cut
  down on debt and preserve what money they have
  left over by using credit card rewards
  responsibly.

2. It's Risky
If youre carrying credit card debt, your
interest rate could be as high as 30 percent or
more. That means if youre only making minimum
paymentswhich could be 20 a monthit will take
years and cost thousands of dollars in interest
to pay off your balance. And that number will
continue to grow until it reaches its cap. Plus,
because late and missed payments will ding your
credit score and make it harder for you to access
credit down the road, its important not only for
financial reasons but also career-wise.
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3. It can Hurt Your Credit Score

• Creditors look at your credit score when they
  decide whether or not to lend you money. Having a
  higher credit score means that youre seen as a
  safer borrower and will likely be offered better
  terms and rates than someone with a low score.
  With an established good credit history, like
  having no missed payments and staying well below
  your total credit limit, it can take five years
  or more for your score to drop by 100 points
  but it only takes one month of missed payments or
  maxing out your card for that number to tumble
  significantly. In fact, around one in four
  Americans has a FICO score that falls into whats
  considered poor territory, according to Fair
  Isaac Corp., which produces these scores used by
  creditors.

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How to Attack Credit Card Debt

• If youre in deep credit card debt, it can be
  hard to see a way out. But there are ways you can
  turn things aroundno matter your income level.
• Here are three steps experts recommend taking if
  you have credit card debt.
• Pay More than the Minimum
• Paying more than the minimum each month on your
  credit card will have a positive impact on your
  credit score. And if you can pay off all of your
  balances before theyre due, its an even better
  ideait takes no longer than two years for just
  one missed payment to mar an otherwise perfect
  credit score. To improve your credit score and
  boost your chances of qualifying for loans and
  other types of financing, begin paying down
  high-interest debt as soon as possible. If you
  dont think you can be disciplined enough to do
  that, consider taking out a personal loanthey
  typically carry lower interest rates and make it
  easy for people with poor or bad credit scores
  (or no scores) to qualify.

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Avoid New Debts

• It can be tempting to keep charging on your
  credit card or take out a loan when you find
  yourself with unexpected bills. However, high
  debt levels lead to less-than-ideal scores, which
  means its harder for you to get approved for
  things like car loans and mortgages. So, if
  youre planning on making big purchases in the
  futurelike a new houseyou might want to cut
  down on your spending so that its easier for you
  to qualify. After all, there are no shortcuts
  when it comes to building good credit!

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Consolidate Your Debts

• If youre carrying a lot of credit card debt, it
  might make sense to get that under control before
  you do anything else. This is because paying off
  your credit cards will improve your personal
  finances in a number of ways. First, it reduces
  your monthly expenses by getting rid of one
  payment per month. Second, it boost your credit
  score if youve been paying off debts for several
  months or more, which can help you build up other
  lines of credit later. Third, assuming you carry
  no balances at allthat is, assume that once your
  balances are paid off each month they dont just
  shoot back up againthen consolidating all that
  debt into one bill could save you thousands of
  dollars over time.

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