Tips for a Manageable Credit Card Balance and a Healthy Credit Score
Written by Cooper & Friedman PLLC on February 27, 2023
We hear a lot of times young adults wishing they would have been made to take a personal finance class in high school, because when it comes to debit, credit, and debt, things aren’t always as straightforward as they seem. According to Scott Horsley, who is NPR’s Chief Economics Correspondent, in his article, “Americans are piling up credit card debt — and it could prove very costly,” the average credit card balance carried over from month to month is up 13% from last year while the number of credit card users who carry a balance has risen from 39% to 46%.
It might be easy in the beginning stages of having a credit card to keep a balance off your record and interest out of your bank account, but as times get hard, inflation rises, and an income alone doesn’t cut it every month, more and more people must rely on the card and the ability to pay it off in small amounts at a time to survive.
This is where it becomes easy for unfair credit reporting or debt collection to come into play. With so many transactions and stress surrounding debt, you might be at a higher risk of forgetting to take advantage of your free Consumer Disclosure or brushing off important documents and notices that can affect your credit score.
But remember that you have rights under the Fair Credit Reporting Act and a way to recover any damages – monetary or credit-wise – with Cooper and Friedman.
Tips for Keeping Your Credit Manageable and Organized
1. Use Your Credit Card like a Debit Card
By only spending what you can afford to pay off in full by the end of your billing period, you can skip the interest rates and the risk of your balance growing out of control altogether. If you don’t have the option of automatic payments (which is highly suggested so that you aren’t hit with any overdue fees), this also gives you more awareness of how much will come out of your bank account when your statement comes out, so that you can better plan for expenses and budgets.
2. Know Your Interest Rates
According to the NPR article, when Bankrate conducted a survey recently, they found that more than 4 out of 10 credit card holders don’t even know what their interest rate is – that’s 40% of cardholders who didn’t know how much money they were surrendering to interest! Save your money and know your card – it might be a good incentive to pay your balances in full, or it might be what you need to jumpstart your debt payoff.
3. Keep an Eye On Your Credit Score and Monthly Statement
In order to combat unfair credit reporting, you’ll want to have knowledge of each change in your credit score, whether that’s good or bad. Enrolling in a free credit monitoring service such as Credit Karma, Credit Sesame, or Experian is crucial in an unfair credit reporting case. Your monthly statement is also a great tool to utilize for monitoring any false charges or account hacks.
4. Take Advantage of your Free Consumer Disclosure
Your information is readily available to you at all times, given that you have the necessary identification documents handy. This can also be free of charge if:
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- A person has taken adverse action against you because of information in your credit
report - You are the victim of identity theft and place a fraud alert in your file
- Your file contains inaccurate information as a result of fraud
- You are on public assistance
- You are unemployed but expect to apply for employment within 60 days
- It is your first disclosure of the year (see www.consumerfinance.gov/learnmore for additional information)
- A person has taken adverse action against you because of information in your credit
5. Make and Track a Budget
Knowing how much money you have and how much money you can afford to spend plays a very big role in how much and what you should be using your credit card for. If you’re focused on credit card rewards (which can be a slippery slope if you aren’t careful), you might only need to be using it for groceries or gas each month to get the reward you’re looking for. Budgeting for food, nights out, or spending money can also lower the potential for a lot of impulse purchases that rack your balance up unsustainably.
6. Don’t Open Too Many Accounts
Finally, keep the number of cards in your wallet to a minimum. It might be tempting to keep applying for cards for their different offered rewards or to extend the no-interest period most cards give at the beginning, but more accounts to manage means more opportunity for a missed payment or a misjudged sense of how much you’re actually spending.
If you or someone you love has been the victim of unfair credit reporting or debt collection in the State of Kentucky and are in need of an experienced personal injury attorney, give the lawyers at the Cooper & Friedman law firm a call. The attorneys at Cooper and Friedman PLLC have over 50 years of combined experience defending the rights of unfair credit reporting and debt collection victims. Contact us with questions you might have or schedule a free case consultation with an attorney by calling 502-459-7555 today.