When used responsibly and properly, credit cards can be helpful and often advantageous. However, many credit card companies today have made it so easy to use this method of payment that it doesn’t take long for consumer debt to pile up and quickly get out of hand. Here are a few ways Michigan residents can use credit cards responsibly and avoid massive debt.
Budget
Creating an effective budget can cure a myriad of personal finance issues, including credit card overspending. There are many budgeting methods, so consumers need to do some research or trial and error to see what works best for them. Sticking to a budget will help to rein in credit card spending, but keep in mind it requires commitment.
Balance alerts
Many credit card companies allow users to set a balance alert. For example, when a user is at or near a certain balance, it can automatically trigger an alert via phone call, text, email or push notification. Once this alert hits, users should remove their card from wallets or purses and leave the card at home.
Credit limit reduction
For some consumers, high credit limits are invitations for overspending. Eliminate this urge by contacting the credit card company and ask the lender to reduce the credit limit to a comfortable amount. Keep in mind that by reducing the available credit limit, the user will increase his or her credit utilization ratio which may decrease credit scores.
If credit card debt piles up and becomes overbearing, bankruptcy could be a possible option. Those in Michigan who feel overwhelmed by seemingly insurmountable credit card debt may want to consider speaking with an experienced legal representative. A knowledgeable bankruptcy attorney can answer questions and help individuals get out from under their debt burdens.
