Every credit card holder can benefit from prudent credit card use. Owning a large amount of credit cards with high APRs and annual fees while carrying a big balance and missing monthly payments can lead to a ballooned credit card debt and a worsening credit score. Meticulous analysis of one’s needs and an extensive comparison of available credit card features are pre-required steps for a wise credit card debt management and help exiting the credit card debt trap.
Limiting the number of credit cards up to 3 that provide enough revolving credit and share low APRs and fees is a good first step towards prudent credit card use. Limiting the number of cards can also lower the risk of being denied for another loan, limit impulsive shopping and save time for managing and paying credit card bills. Comparing APRs, annual and cash withdrawal fees, penalties, grace periods and valuable perks offered, can lower the cost of holding this type of debt. No one should hold a card only for prestige or any kind of psychological purposes.
A credit card with low APR should be used for transferring any outstanding balance of costlier credit cards. Credit cards with no balance and no annual fees can remain idle while other cards that carry some sort of periodic fees can be canceled. A number of loan institutions and credit card companies offer comprehensive plans for credit card consolidation and financial advice for better debt management.