10 Ways to Avoid Credit Card Debt in Chicago
Credit cards can seem to be a blessing for someone who is struggling to get by. But as the debt mounts, you may begin making fewer payments, leading to ridiculously high interest rates. That can lead you to consider filing for bankruptcy in Chicago.
But a recent article by a debt expert Andrew Housser explains how people can avoid using credit cards as a crutch that ends up ruining their credit scores.
A Cook County bankruptcy law firm can help you if your credit card debt or other forms of debt have gotten out of control in your life. We can work to help you save your house from foreclosure or choose whether to file for either Chapter 7 or Chapter 13 bankruptcy.
But it's not always necessary to file for bankruptcy. So, consult with a law firm dedicated to helping you protect your assets. According to the article, in recent decades household debt has gone up. From 1968 to today, household debt has increased from about $1.3 billion to $800 billion. But overall revolving household debt is down 17 percent from fall 2008, just before the country's recession.
Over the last few years, you may have been cutting back on debt and trying to get it stabilized only to have it shoot back up. These are some tips to cutting back on credit card debt:
- The first step is to establish a budget and calculate how much you can spend. Live within your means and don't overextend yourself. You may choose to switch to cash only.
- Don't be fooled by credit card company rewards programs. The advertisements and TV commercials are everywhere. Sign up and get this. Use this card and be eligible for that. A recent study by the Federal Reserve Bank of Chicago found that when people sign up for a credit card that offers rewards, their spending increases.
- Borrowing money adds to your debt. Personal or home equity loans don't cancel out your credit card debt.
- Understand and analyze why you got into credit card debt in the first place so you can address your bad habits.
- Don't overspend one time because it may bite you. Just when you make a big purchase, you'll need a new transmission in your vehicle or a major roof repair on your home. It's best to stay strict with your spending.
- It can sometimes be easier to manage a little bit of money rather than worry about what to buy when you have a lot. So, spend as if you have little.
- Make wise decisions about what you "must" have.
- Rebuild credit by paying off your credit card each month. One way is to use a credit card to pay off a regular bill and pay it off quickly.
- Bankruptcy may not be the cure. Once you file once, you have to wait a certain number of years to file again, so don't use it as a crutch.
- Get help if you need it. Sometimes you can talk with credit card banks and work with them to help you.
But if you are having financial problems and you don't think the banks will listen, consult a Chicago law firm that can help assess your financial situation and make recommendations to help your future.