Whether you are new to credit cards or are trying to achieve credit card debt payoff, there are a few things that might be helpful to know. Understanding more about credit cards can level a financial playing field that is intentionally complex and confusing. Here are some of the things to know about credit cards.
Understand Utilization Ratio
Utilization ratio refers to how much of your credit limit you are using. If you have a $300 balance on a $1,000 credit line, your utilization ratio is 30%. Most experts recommend keeping your utilization rate as low as possible, as a high utilization could impact your credit score. Plus, the higher the balance, the more interest you’ll accrue. In short, if you are using credit cards, you want to try not to use them more than you can afford. Aim to keep your balance at a level you can easily pay off every month.
How Interest Works
What is a good APR for a credit card? The lowest APR you can get is based on your credit score. You might have an introductory offer when you first open a credit card. It’s a low APR, and you don’t think about it for a long time. Then, the next time you check it, you notice your APR is closer to 20%. Or you failed to pay on time for a few months, and the lender raised your interest rate. This is why you want to have the lowest interest possible. Achieving credit card debt payoff becomes harder the more interest you accrue as the hole can get deeper and deeper the longer you carry your balance.
Why the Number of Cards Matters
When you have more cards, you likely have a larger credit limit. You can spread out your spending across multiple cards. The math can get hard, however. Some cards might have different interest rates, credit limits, and payment dates. It can be a headache having to manage all of them. Plus, if you open too many cards at once, it can potentially impact your credit score.
Is it Better to Keep Cards Open?
It might be better if you have a card or two open for a few years. It shows you are reliable to lenders. It’s also a positive factor in your credit score as you have an established credit history. If you need a credit card consolidation service, the service might close your cards. You won’t get the benefits of having a still-open card on your account. Instead, you want to find a service that can extend you a line of credit. You can achieve credit card debt payoff, and you pay back that line of credit. That way, you keep your cards open and keep getting the benefits.
Anyone Can Achieve Credit Card Debt Payoff with the Right Strategy
One of the better ways of achieving credit card debt payoff is simply spending less while increasing your monthly payment. Put extra money towards the card when you can. You can also use services that could extend you a line of credit at a lower interest rate. They pay off your cards, and you pay them back. You need to qualify for these services, however.
About Tally
Tally aims to help you worry less about finances and get back to focusing on what really matters to you. To do that, Tally can help you break free from your credit card debt. The Tally app was created to help level the financial playing field, which is intentionally complex. Through Tally’s credit card balance consolidation, you can simplify the entire process. This helps you get back on the right track and start planning for the future. You can get started with the Tally app in just a few minutes. If you need help with credit card debt or want to see if you qualify for a lower APR, check out Tally.
Turn to Tally for help with credit card information or credit card debt payoff at https://www.meettally.com/
Disclosures: Lines of credit issued by Cross River Bank, Member FDIC, or by Tally Technologies, Inc. (“Tally”), NMLS #1492782 (http://nmlsconsumeraccess.org); see your line of credit agreement. Lines of credit not available in all states.
