1. Take inventory. How many credit cards do you have? What's the balance and minimum monthly payment on each? What's the total balance? If it's more than you thought or can afford, it's time to pare down.
2. Check out the cost of your credit cards. What's the interest rate on each card? What's the annual fee? Does your card offer a grace period? If the card doesn't have a grace period, or if you carry over a balance, or take a cash advance, you're usually charged interest right away.
3. Get one low-fee or lower-interest card and use it wisely. Too many cards can equal too many shopping sprees and result in excess debt. Make Pacific Advantage your first stop when starting your search. Check to see if you can transfer existing debt from your various credit cards to your new lower-interest credit card.
4. Make the largest monthly payment you can afford. While it's ideal to pay your balance in full each month, it's not always possible. But paying the monthly minimum may do little more than cover the accrued interest.
5. Watch out for "teaser rates." Your mailbox may be brimming with unsolicited credit card offers that promise attractive low-interest rates. But if you read the fine print, you'll see that after six months or so the issuer may double the low introductory rate. When the rates go up, you may find yourself owing a lot of money at a high interest rate.
6. If you get in over your head, don't bury it in the sand. If you're having trouble making your monthly payments, contact your creditors before they contact you. If you're already using your answering machine to monitor calls from bill collectors, or refusing to open your mail, you need help. Contact Pacific Advantage, or call the Consumer Credit Counseling Service at (800) 873-2227, a nonprofit organization offering financial counseling, debt management, or educational services to consumers.
