Post-holidays, maxed-out credit cards can add a layer of stress. Overspending during festive times is common, and reaching the limit on your credit card may lead to financial challenges. Having a maxed-out card can impact your credit score and result in higher interest rates. If you’re facing this situation, don’t worry – here are steps to help you start attacking your credit card debt.
When your credit card is maxed out, it means that you’ve exceeded your credit limit, and you have no more borrowing power until you’ve made payments against your balance. A maxed-out credit card can be a sign of financial strain, prompting the need for a change in spending habits to correct it.
If you find yourself with a maxed-out credit card, rest assured, you’re not navigating this challenge solo. The most recent study by LendingTree discloses that nearly 1 in 4 (22.7%) cardholders across the largest 100 U.S. metros are currently contending with at least one maxed-out card.
Navigating your way out of a maxed credit card means crafting a plan and sticking to it.
It might be tempting to use another credit card now that one is maxed out. However, try your best to avoid that. A maxed-out credit card not only carries heaps of debt, it also is damaging your credit score. The last thing you want to do is add more debt to this situation.
The first thing to do when you have a maxed-out credit card is to revise your budget. Look at your budget in terms of needs and wants. Needs are things like food, shelter, and transportation. Wants are things that you can probably do without, like new shoes or a new computer. Cut back on the “wants” category and prepare to use that money to pay down your debt. Keep in mind that this isn’t a permanent thing. Once you dig out of debt, you can add those “wants” back.
Now that you have some money freed up, it’s time to figure out how you are going to pay down the credit card debt. Think things through and pick a strategy that you will stick with. Here are a few options:
As you shape your financial strategy to tackle credit card debt, know that Fidelity Bank is here to guide you. Think of us as your smart friends, ready to analyze your situation and provide tailored recommendations that fit your specific scenario. Schedule an appointment with us Schedule an Appointment today, and let us share how we can assist you in preparing for a prosperous year ahead.
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