5 Tips to avoid credit card debt - Dallas Bankruptcy attorney adviceMany of our bankruptcy clients come to us with completely out of control credit card debt – but that doesn’t mean they’ve been completely irresponsible. Thanks to higher interest rates and compounding interest, just a few missed payments can put you past a point where it’s nearly impossible to catch up.

Learning to manage credit card debt is a huge step in avoiding bankruptcy. If you follow these 5 simple tips, you’ll keep your credit cards under control and avoid spiraling credit card debt.

1. Set a budget and stick to it.

Credit cards make it far too easy to spend money you don’t have. If you know what you can spend each month, it will be easier to avoid those spur of the moment purchases that you can’t really afford.

2. Don’t carry a balance for more than 6 months

Compounding simple interest adds up quickly, and after about 6 months, you’ll end up with a much higher balance that’s hard to pay off. Think of your credit card interest as a small pebble that causes a huge avalanche… it starts off small, but quickly becomes a huge force.

3. Beware of reward cards

Do you spend a lot on your card to get free airline miles or free shipping? Don’t lose sight of how much those cards are costing you. In many cases, when you include the interests and fees, you’re paying more than what your “free” reward is worth.

4. Pay attention to interest rates

If you’ve got a good credit rating, you’ll be eligible for lower interest rates. Consider switching to a card with a lower interest rate to help you keep potential costs down.

5. Watch out for balance transfer specials

Credit cards will offer special rates for balance transfers, but most people don’t realize that the transfer rates only last for a short period of time. After 6 months (the standard period now), your interest rate will jump back up to the normal rate, and your balance will start to skyrocket again. If you’ve got some interest-free time available, you should pay down your balances as aggressively as you can.

If you think it might be too late for these tips to help, you should call us for a free debt consultation. Our experienced bankruptcy attorney will take the time to listen to your situation and then explain all of your options. We’re here to help – call us at 214-760-7777.