November 7, 2008, Newsletter Issue #138: Difficult To Chip Away At Credit Card Balances
Tip of the Week
It's a good idea to request your credit report regularly, but you do not need to see your score to feel the weight of credit card debt problems. When your credit is in disrepair your interest rates tend to go up. As your interest rates climb your minimum payments just don’t make a dent in your overall balance.
This can be very frustrating because you are sending money into your credit card accounts every month but the balance never seems to go down. In the end, you could be paying five times the amount that you originally spent.
This falls into the category of credit problems you can fix yourself, however. Whenever you can afford to, send in larger payments than the minimum amount due. The more you can do this, the easier it is to counteract higher interest rates. This will lower balances on your credit cards much faster.
Not only will this save you money in the long run, but it will show businesses who request your credit report that you are able to handle the credit you currently have. Unless you're able to handle your current limits and balances, they will not be likely to give you more.
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