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How To Productively Use Your Credit Card

To keep from feeling anxious and stressed about money, gain insight on how to use credit cards as a resource rather than a burden.

While credit cards are undoubtedly useful, they can also quickly land you in a spot of financial trouble if you do not use them wisely. If you have recently filed for bankruptcy or are inching closer to filing for bankruptcy in New Mexico, now is the perfect time to learn how to use credit cards for the tool they are rather than let them become a heavy financial noose around your neck.

Do everything you can to avoid wasting money on interest

No matter how low the interest rate on your credit card is, the fact remains that you are spending money that you do not have to. When possible, pay your credit card balance off in full every month to avoid incurring interest fees. It is true that credit card companies want to know you are using your credit card, but you can do that without carrying a balance from month to month.

Take full advantage of rewards

Depending on the type of credit card you have, you may have some great rewards to take advantage of. If so, you can make everyday purchases with your credit card to rack up points, cash back, airline miles or whatever perks you have. Then, you can use the money set aside in your budget to pay off your card. You take care of all your financial responsibilities without worrying about going into debt, and you earn some money or rewards at the same time.

Pay your bill early

Of course, you want to pay your credit card bill on time, but it is even better to pay it early. Not only do you avoid late fees by paying your bill early, but you also do your part to show your credit card provider you are a responsible customer. When you do that, you make it easier for them to want to lower your interest rate or increase your credit limit.

Ask to raise your credit limit

How much of your total credit you currently use impacts your credit score. This is your debt-to-credit ratio. The closer you are to maxing out your credit card, the higher your debt-to-credit ratio is, which negatively impacts your credit score.

If you have been a long-time customer responsible with using your credit card, your credit card company may not mind raising your credit limit, which can improve your score. If you manage to get a raise on your credit limit, it is best to pretend it has not changed. That way, you do not take two steps forward and one step back.

Credit card debt is on the rise not only in New Mexico, but all across America. If you feel your money woes have spiraled well beyond your control, consider turning to an attorney in New Mexico who can help you file for bankruptcy and regain financial footing.