Fixing Your Credit Part 2 ; Using 1 Credit Card At A Time

Having good credit is one of the most important aspects of financial health. Minimizing your debt and being a wise financier will go a long way toward lowering your stress level, and making sure that when the time comes you are more likely to get the loan you need for an emergency or a major life expense such as the home or starting a business.

In addition to paying off any debt you may already have one bill at a time, you can make repairing your credit and eliminating debt easier if you can manage to stick to using a single credit card. On the face of it this may seem like a daunting task, but it can be done.

The most important thing to remember is that as much as possible you should use a credit card for needs not wants. Even something as innocent as going to the grocery store can quickly turn into an overly expensive event if one too many snacks or good deals catch your eye. Do your best to track your spending then select an appropriate amount of cash to have on hand every month, and stick to that amount.

If possible, avoid taking your credit card with you on ordinary trips such as to the grocery store to minimize the temptation to spend too much. If you find yourself simply unable to resist spending more than you allot yourself, then keep your card in the possession of someone you trust, and ask them whenever you need to make a transaction. This person will become your debt/credit buddy, and can be a real lifesaver.

Reward credit cards can be a double-edged sword. Some people can be severely tempted to spend more because they’ll receive more in the end, but the more you risk putting on your card the more you risk going into debt.

If for whatever reason you need to make an extra purchase, do your best not to go beyond 30% of your total credit line, this will keep your debt reasonably manageable while at the same time showing the credit monitoring institutions that you don’t spend recklessly, as racking up too much debt at once can hurt your credit by itself. This is especially true for new borrowers who have not shown an established history of paying bills off on time.

A single credit card may seem very restrictive, but done responsibly it can be an easy way to repair and rejuvenate your credit history, or to instill in a young person the necessary mental tools to avoid excessive spending.

~Guest Blogger~

Please take the time to join us for Fixing Your Credit Part 3 Talking With A Financial Advisor