There are serious consequences of non-payment of debt. It will hurt your credit standing, affecting your chances of availing of credit in the future, and there may be legal battles to face. It will also affect your future cash flow and cause other problems. So, below are steps you can take to used credit wisely and responsively:
- Charge only what you can afford to pay. Experts says your total payments for debt, loans and credit card bills should not be more than 15 to 20 percent for your take-home pay, excluding rent or mortgage payments. Set a monthly limit of charges and don’t go beyond this amount.
- Pay your credit card bill on time, and as much as possible, in full. Arrange to have your credit card bill paid online through your bank so you can save on time. If possible, pay the full amount due on your bill to avoid finance charge. If you can’t, at least pay the minimum amount due every month.
- When you receive your bill, compare this against your copies of sales slips for your purchases. If there is discrepancy, call the credit card issuer immediately.
- Safeguard your credit card. Treat it like cash and make sure it doesn’t fall into the wrong hands. Keep credit card information handy. (your credit card number, as well as the phone number of the credit card issuer). Report lost or stolen credit cards right away.
- Find yourself in debt trouble? Call your creditor right away and own up to your situation. You’ll find that most creditors will help – they want to get paid so they will work with people who are truly interested in getting out of debt.
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