Are you one of those people who are afraid of falling into financial hardship? Financial problem can happen to anyone. Especially so for credit card owners. But there are ways to avoid financial risks that you might encounter in life. Knowing how to prevent them is always the best thing to do.
Below are some 3 tips for credit consumers:
1. Pay off your credit card debt first.
With rising rates of interest finance and charges, consumer experts advise credit cardholders to prioritize paying off their credit card debts. In so doing they can avoid making substantial payments on interest charges as well as on other fees. But how can they do this?
Credit cardholders may apply for debt consolidation loans which can provide them funds to pay off their debts in one full-swoop. This way, continuous debt accumulation due to high rates and fees can be prevented.
They can transfer and merge their outstanding balances to a credit card with zero balance transfer interest rate. It will be easier for them to pay their credit card debts since they won’t have to pay additional interest rate fees. Furthermore, they will only be required to make just one payment each month making repayment a much simpler task.
2. Set-up a contingency fund.
Consumers are also reminded of the importance of establishing contingency funds. After all, they will have accounts from which they can withdraw cash that they might need to finance an emergency, such as an immediate medical operation, a sudden loss of job, or an injury that might prevent them from working for several months.
Having a contingency fund can also help consumers maintain an excellent credit score. After all, if a consumer has substantial savings, he won’t need to borrow instant funds, which often impose high rates of interest and fees, in case an unexpected event suddenly arises.
3. Seek professional advice.
Consumers who wish to rebuild their bad credit history are encouraged to sign up for credit counseling services. After all, through the help of a certified finance specialist, they can certainly learn how they can manage their personal finances more efficiently.
A session with a credit counselor can help consumers be aware of practical techniques that will enable them to improve their credit scores. And should they practice every strategy and tip that they will learn from a credit counseling program, for sure they will be able to stay on top of their finances all the time.
In fact, consumers who are stuck in an extremely bad debt situation are advised to complete a credit counseling session first before thinking about filing for bankruptcy. The law requires credit counseling to ensure that those who seek bankruptcy really have the right reasons to do so.
