How to Cut Down on Credit Card Use
Economists say that the recession is over, but several major banks stated that the default rate on their credit cards were at an all-time high and likely to get worse.
According to a "Reuters" report, credit card defaults are attributed to unemployment, which rose to a 26-year high of 9.7 percent in August 2010. Sadly, the jobless rate is expected to continue to be high, at around 10 percent, until the economy rebounds.
Find tips on how to do keep from becoming part of this unfortunate trend.
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Instructions
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Request a debit card from your bank or brokerage firm that you can use like a credit card. This will draw your purchases from your account rather than increase your debt. Of course, you must make sure not to spend more than is in your account, otherwise you will overdraw from your account and end up owing the bank money. When an account is overdrawn, you may incur overdraft fees which can be costly.
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Keep only one credit card at a time. Don't carry it with you, except when you know that you will need it for some specific purchase. Never carry it with you when you are just shopping or browsing randomly. Impulse buys get many individuals into trouble, so it's safer to leave the plastic at home.
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Ask your credit card company to keep your limit low as well as your rate. A high limit is an invitation to splurge for those who lack self-control.
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Don't put any more on your card than you can pay off at the end of the month. This not only keeps your card balance under control, it saves you a great deal of interest, as many companies charge no interest to those who do this.
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Tips & Warnings
If you request a debit card, make sure to keep track of your balance. Many banks offer online banking and they can also send you a text message with your balance amount.
