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Managing credit cards wisely

Credit cards can be beneficial in a number of ways but when they are handled unwisely, they can lead you into financial trouble. At Ammerman & Goldberg Bankruptcy Law Office, we are often asked for assistance in reducing credit card debt and advice on how to manage cards more wisely.

First of all, if you have already accumulated credit card debt, you may be tempted by those letters in your mailbox to transfer your balance to a new card with lower or 0 percent interest. However, this is not recommended as you will be tempted to use your old card with the now zero balance, thereby only adding to your debt. If you can exhibit control by closing your old account, and not using your new card for any new purchases, it is possible to pay down the debt this way and some people have managed to do so, but it is risky.

Second, using more than one or two credit cards is simply a recipe for disaster. Turn away from all those retail store offers which offer you a certain percentage off of your purchase. Those cards often have much higher interest rates than regular credit cards and if you are a frequent shopper at that store, you will probably build up a balance that you cannot pay off each month. Keep one major credit card in reserve as an emergency for a car break-down or hospital visit, and use the other card for small purchases. If you are worried about spending too much, you can ask the credit card company to lower your limit to one that won’t get you into trouble.

Third, make sure that you keep track of your purchases and that you pay off your balance each month. This will not only keep you out of trouble with credit card debt, but help you build your credit report. For more information on how to maintain financial health, visit our page.

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