You’d struggled with debt, and then finally saw the light: shortly thereafter the plastic was cut up. But perhaps you were convinced to keep just one credit card. Here’s what to do with it.
Nowadays, credit card lenders are responding to not only market conditions but new government regulation when deciding what to offer consumers. They need to lower their aggregate account risk, so they are aggressively cutting the size of credit lines, involuntarily closing some credit card accounts to future usage, souring initial terms on which someone is issued a new credit card, hiking interest rates, and generally limiting any change of terms in the cardholder’s favor that doesn’t involve them increasingly the likelihood of recovering at least a portion of an outstanding debt balance.
In reponse to these factors one should use their card just once for a very small transaction every couple of months. This keeps the transaction history on the card fresh, reducing the chance that the lender cuts out the account completely. Of course, paying off the tiny transaction well before the payment deadline is key to forming new debt-free financial behaviors. Consider not keeping the card in a wallet, but rather some hidden location in the house to avoid the temptation to use it. Call the lender and see if you can negotiate the interest rate lowered on the single credit card, presenting alternative, more attractive offers from competitors to entice their revision of terms. Check your credit score for free with the major rating agencies and dispute any inaccuracies that negatively impact your score, since the score impacts your ability to get out of debt in some surprising ways.
What do you think about these ideas on credit card management? Any other helpful tips?
Raj Patel writes for DebtGoal.com, a do-it-yourself system for getting out of debt and lowering your interest costs. DebtGoal.com incorporates all of the techniques discussed in this post and can help users understand and get visibility to and manage their debt finances.
Tags: credit card lender approaches to consumers, credit card management, credit card strategies for those in debt, new credit card lender rules, the new rules to credit score management
