How many bad financial situations could have been avoided if basic credit card education was covered in schools? Many individuals end up getting credit cards without a full understanding of the best ways to use them. With improper credit card use, the debt grows while interest accumulates. Combined with other financial strains like student loan repayments, car payments, and mortgages, the addition of credit card debt can lead someone to insolvency.
When faced with insolvency, it can feel like the only option is to throw in the towel and declare bankruptcy. If this sounds like your level of financial desperation, know that there’s help out there in the form of a Licensed Insolvency Trustee. These professionals, formerly known as bankruptcy trustees, have the knowledge and expertise to suggest the best strategy for your personal debt relief.
Just take a look at this guide to bankruptcy recovery to see what life can be like after bankruptcy. In some cases, bankruptcy can be avoided altogether if the individual is a good candidate for a consumer proposal, a means of negotiating debt with creditors. Both consumer proposals and bankruptcies are forms of debt recovery that actually lower the amount of debt you owe, which make them the best ways of getting a fresh start when times are tough.
If you’re struggling to make bill payments and don’t see a way out, it’s possible that you’ve been using some unideal credit card techniques. But credit cards can be a valuable tool in building and rebuilding credit. Here are a few tips and strategies that you can implement in order to be a responsible credit card user.
Keep Track of Your Spending
This seems like a no-brainer, but you’d be surprised by how easy it is to lose track of your credit card spending and spend more than you can actually pay. There are plenty of incredibly helpful money-tracking apps that you can use on your phone. If you’re a little more old-fashioned, then make sure you review your credit card statements and categorize your spending in a spreadsheet for your records.
Make Payments on Time
As soon as you get your credit card statement, check the payment due date and make a note of it in your calendar so you don’t forget. Silly errors like simply forgetting to make payments can result in extra interest charges or late payment fees that can set someone back financially.
Consult a Credit Counsellor
There really is no substitute for the financial guidance of a licensed and trained credit professional. Especially if you’re in a position where you’re considering declaring bankruptcy or filing a consumer proposal, then credit counseling services can help you fully understand your options.
It might be that your case doesn’t warrant full debt recovery plans like consumer proposals or bankruptcy, but you still need a professional to help you budget and identify your spending problem areas.
Your credit limit should be one that won’t tempt you to spend more than you can afford. Sometimes companies will recommend credit increases, but if you can’t afford to pay your balance each month, then don’t increase your limit. If you’re having persistent problems with credit, then call your provider and request a credit limit reduction. It doesn’t take long for them to adjust your account settings and you’ll be more confident that you’ll be able to make your payments regularly.