Credit card specialists are weighing in on the issue of cardholders having excessive debt. With charge-off and delinquency rates at their highest levels in living memory, experts are advising millions of American consumers to rein in their credit purchases to avoid catastrophic financial problems. The mounting debt is also driving more and more card companies to closure. If unpaid credit balances continue to rise, analysts say that the credit industry can suffer tremendously.

According to many experts, cardholders with credit scores below 700 should consider assessing their credit purchases to pre-empt any financial problems and further worsening of their credit ratings. Because creditors and lenders rely on credit records to determine the credit worthiness of consumers, maintaining good histories and records is of utmost importance.

Consumers with large debt-to-credit limit ratios should also seek financial advice on how to improve their credit standings. Most banks and financial institutions base interest rates and terms on how cardholders perform when it comes to paying balances and settling their dues.

If cardholders are unable to regulate their spending, a debit card or a secured card are often the best solutions. Secured credit cards work in the same manner as conventional plastic. Unlike ordinary cards, however, secured cards require a bank deposit to act as a collateral or security in case cardholders fail to pay on time. Card companies would simply deduct the required minimum payment amount from the account to pay for the balances. secured credit cards also give consumers more leeway to miss payments and not be reported to the credit bureaus. This allows them to maintain their credit ratings.

Debit cards, on the other hand, are simply cash in the form of plastic. This particular card type allows consumers to pay for purchases as if they are paying with cash. If debit cards are compromised or if cardholders become victim of fraud, however, they can lose actual money because of the bank account tied with their cards.

Experts also argue that having too many credit cards can make issuers think that a consumer presents more risk because they have more cards to maintain. Banks and card companies would often resort to slashing credit limits or raising fees to prove their point.

Industry specialists also advise against applying for too many cards especially if the companies reject applications outright. Each application is recorded in the consumers' credit reports and are often considered by creditors and financial institutions as signs of distrust by other card companies.