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Smart Debt Management
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by: Dave Saltonstall
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Word Count: 364
When carrying credit card balances, it is important to exercise proper debt management. It is very important to have a plan in order to work to pay off those balances. Credit card companies have a number of tactics that they use in order to keep you from being able to pay off those balances. The minimum payment is one thing.
If one only makes the minimum payment on their card, they will most likely be paying off the card for many years. In addition, they will be paying a lot of extra money in interest, because they are making more payments their account. Another tactic that the credit card companies use is playing with the interest rate that people pay. They will often offer teaser rates for the first 6 months or a year, then raise the interest rate much higher after the introductory period. This tactic draws people in and allows the credit card companies to make more money, at the expense of consumers and their family budgets.
Families that use smart debt management can reduce both the balances that they owe and the amount of time it will take to pay down their credit card debt. Making a payment that is above the minimum payment can make a major difference and is a way to reduce what you owe. In addition, if a consumer makes the same payment month after month, and not noticing that the credit card companies will drop the minimum payment in an attempt to keep your balance higher, that can help with your credit card balance and is an example of practicing good debt management. Being on time with your payment is also a good way to improve your debt management.
Even being late by one day can result in a late fee, and often times the credit card company will raise your interest rate on the card, making it even harder to pay down the balance that you owe. In addition, paying off the card that has the highest interest rate, not the card with the highest balance, can allow a consumer to more quickly pay down their credit card debt.
About the Author
Dave Saltonstall has been a member of the Financial Services Authority (FSA) for many years, over this time he has built up a network of contacts and strongly recommends anyone with debt management problems to visit debtfree.org.uk!
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