Friday, April 08, 2011

5 Simple steps to avoid credit card disaster

In today's life credit is very popular among consumers because it maintain a standard of living . People can purchase any kind of their needs with the help of credit card but it can be a disaster for you if you will not maintain it properly. There are millions of people which are facing the disaster of credit card debt in recent days. So there are some easy tips by which you can reduce it .

1. Avoid excess use of credit card : Now a days lot of people purchase their their most of needs with the help of credit credit card and then then fell into credit card debt. Because if you keep your utilization ration of your credit card more than 30 % it will reduce your credit score. So you need to keep this below 30 % to maintain your credit score.

2. Avoid late payments : According to the new credit card rules you no need to give penalty of late payments of your credit card but it does't mean you cansleep peacefully and make late payments because according to new FICO rule lot of late payments can also affect your credit score . So always try to make payments on time.

3. Avoid variable rate cards : After the Credit Card Reform Act , most of the credit card companies are encouraging people to take variable credit card because in this the company can charge intrest on you so it is better to avoid it.

4. Don't take 0% balance transfer card : Most of the people take 0 % balance transfer card after the credit card law but you should avoid this because the credit card insurers has increase its fees from 3 – 5 % . It means you have to pay higher amount of noney for consolidating your credit card debt.

5. Don't take cards for kids : It is better to not take any cards for kids because you have to take the full the responsibility of all the payments . It means if your kid fell in the credit card debt then you need to pay it.

So that was some useful tips by which you can decrease the rate of credit card debt as well as it also help you to build a good credit score.

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