How to Borrow Intelligently

One of the main problems that comes up when consumers decide to consolidate debt and borrow more is that they haven't learned from past mistakes. It can take years before they finally put it all together, but being a smart borrower doesn't have to take long with our help. Here's a look at some easy tips for borrowing money wisely:

• It should come as no surprise that borrowing wisely means making monthly payments on time, every time. Statistics clearly show that late payments are one of the leading causes of credit card debt. With late payment fees that can easily reach over $35 a month, you should have all the incentive you need to make your sure your on time. If you're just forgetful, set reminders for yourself or sign up for an automatic payment plan through your bank.
• As any smart borrower could tell you, it's important to read the fine print when it comes to lenders. Sure, that balance transfer may sound appealing now, but what happens in 6 months when the interest rates sky rocket? Credit card companies are notorious for hiding their little tricks in the fine print so pull at the magnifying glass if necessary.
• Even if you choose to consolidate debt and borrow more, always make more than the minimum required payments. By consolidating your debt, you may be eligible for lower monthly payments, but they won't help you get your debt paid off any faster. Smart borrowers even go so far as to pay off their entire balance each month.
• Do you only have one or two credit cards? Do yourself a favor and keep it that way. Trying to juggle too many lines of credit is the opposite of smart borrowing. It's simply too difficult to keep track of a dozen different credit cards, with their different due dates and minimum monthly payments. It's almost inevitable that those who have too many credit options end up putting themselves in debt.
• If you're planning on taking out a new credit card or any type of line of credit, do your homework to find the best possible interest rate. By now, everyone should know how important their interest rates are. In essence, they represent the cost of borrowing money and if you get stuck with a high rate, you'll end up paying a lot more over time.
• No matter how much debt you've accumulated or how much you still need to borrow, saving money is always important. While repaying borrowed money is probably your number one priority, do not neglect your savings. You just never know when something could happen, such as a car accident or hospital visit, that could require you to break out the savings.
• Finally, don't fall for the idea that declaring bankruptcy will be an easy fix to your debt problems. While bankruptcy may be able to help some people in the right situation, it can be a disaster for many. Declaring bankruptcy will absolutely ruin your credit score for the next several years and making borrowing more money all but impossible.