Kelly Ritter, Negosentro | While credit cards have certain benefits, they can also get you into trouble if not used responsibly. Many people experience their credit card maxing out due to unpaid bills that result in increased balance, or worse, reaching their credit limit.
So, what do you do when this happens to you? Below are helpful and practical ways you can do to get back on track and get out of your credit card debt:
- Don’t apply for more credit.
Just because your credit card maxed out doesn’t mean you should apply for a new credit card, as you might be tempted to do just that. It is not a wise option, but a lot of people do it.
If you think about it, you’ll most likely end up doing the same thing to your new account and find yourself buried in more debt—possibly beyond what you can handle. The next thing you know, you’re in the vicious cycle of paying credit with credit, which costs you more in interest charges and thus increasing your debt load all the more.
If that’s your current case, by all means, stop. The only way to finally settle your debts is to stop accumulating debt. Start living on less and stop spending on unnecessary things to make more space on your income to make payments on your credit card.
- Stop using the Credit Card.
When people are faced with this dilemma, they usually tend to do either of these things: apply for another credit card (as mentioned above) or make a small payment and continue using the card.
Either way, you will just put yourself into the vicious cycle of paying debts. The only way to get out of the rut is to make that decision to stop using the credit card.
Leave your credit card at home so you can avoid making impulsive purchases. Better yet, cut it up or place it in a card shredder. Do whatever it takes to stop using it so you can prevent your balances from increasing and finally start getting your debt paid off.
Don’t make the mistake of thinking that you can keep it in your wallet and not be tempted to use it. It’s very easy to tell yourself, “I’ll just use it this one time,” but we all know that one time leads to another, and will further lead to more spending, higher balances, and bigger monthly payments.
- Work on your income and budget.
Many people don’t realize that many of their purchases are unnecessary and excessive. This is one of the major factors why many people max their credit card out. An insufficient income and a lifestyle that depends on plastic accumulate credit load. So, what can you do now?
You may think of ways where you can cut back. Maybe you can cancel your gym membership or get rid of your cable. Maybe you need to look into you shopping behavior and decide to shop only when necessary. Maybe you need to spend less on eating out and start preparing your own food at home.
Apart from that, you can also look for a part-time job or freelance projects you can take on to have more multiple streams of income which are a great source to get rid of your debt(s).
Credit cards, no matter how small they are, remain to be plastic. Then again, it can cause a huge toll in our lives. So, be cautious of how you use them to avoid accumulating debts or just as how the Millennials say nowadays, “broke AF.”