And here's the real kicker. There are no restrictions to prevent the card issuer from lowering your credit limit. That impacts your credit report because it looks like you're maxed out! And it makes it easier to inadvertently go over your credit limit, triggering a penalty! Be sure to "opt-out," telling the card issuer to deny a transaction if it would trigger an over-limit fee.
There's really only one way to avoid all of these traps: Pay down your credit-card balance faster, using this strategy:
If you take the current minimum monthly payment, double it, and keep paying that same amount every month without charging another penny, your card will be paid off in less than three years.
That formula applies no matter how large your balance, or how high the interest rate. In fact, now you'll see the benefits of that strategy explained on your credit card bill, which must show you the amount you must pay monthly to eliminate your balance in three years.
In these days of financial hardship, it may be impossible for many people to make larger payments. But short of winning the lottery, it's the fastest way out of credit card debt.
Don't fall for those debt-settlement companies. Most require you to divert your current payments to an account giving them the leverage to negotiate. Meanwhile, your credit is further ruined -- and they take their fees before negotiating any settlement.
If you're really over your head in credit card debt, call Consumer Credit Counseling Services at (800) 388-2227. That will connect you to the nearest local office, where you can receive reliable advice either in person or over the telephone.
You can pay down your debt, but it takes discipline and income to do it. And that's The Savage Truth!