People who get their first credit card have the tendency to swipe it away for everything they buy or every service they take. They may think that the costs are small at a time but they’ll definitely be surprised with how much they have to pay when they get their monthly bill. Does this sound familiar?
You’re reading this article, which means that you probably have large credit card debt that you want to bring down to a manageable level. At the same time, you don’t want to deactivate your account because you see this purchasing power as a safety cushion in case of financial emergency.
You’re probably promising to yourself by now to be more careful with your credit card use if you can only survive the huge debt you currently have. Don’t worry though because here are 7 ways to do so.
Acknowledge That You Have A Financial Problem
By starting to read this article, you’re definitely one step closer to a manageable or zero debt. You know you have a money problem and you’re now making conscious efforts to find practical solutions.
Although you have the option to close your account to stop incurring high finance fees month after month, keeping your account active while paying off debts is still possible as long as you can afford to make repayments and willing to deal with the additional fees.
Aim To Maintain One Dependable Account And Close All Others
It isn’t practical to maintain more than one credit card from different banks especially when you’ve maxed out each one of them. So determine which account best suits your lifestyle and cut off the rest. If that’s not possible, a practical tip to dealing with financial liabilities is to deal with one with the highest interest fees. It’s a long journey but at least you’re taking action now.
Talk To The Credit Card Company About Possible Solutions
If you’re able to maintain one card, consider discussing your financial situation with your credit card provider. Financial institutions especially banks would be willing to help you out with an arrangement that suits you. Make sure to let them know that you’re looking for a suitable repayment plan without adverse effect to your ability to use the credit card just in case of emergency situations or for rare occasions when you want to celebrate a little.
Take Out An Extra Loan But Do It With Caution
Although it isn’t recommended to use loan to pay for another loan, there will always be times when you really have to apply for the extra funding. Perhaps you are qualified to take out a personal loan to help you with an emergency situation or simply to have enough money until the next payday. Before proceeding though, make sure to take advantage of a free loan calculator available online to ensure that you can afford to make the monthly repayments.
Don’t be confused with the discussion of Annual Percentage Rate (APR) especially with payday loans. You’ll have to reduce the calculations into monthly basis to see if you can really afford the additional financial obligations. Talk to an experienced loan professional to fully help you make an informed choice.
Plan To Pay Your Credit Card First Every Payday
When it comes to personal finance management, it’s recommended to deal with your financial liabilities first especially your credit card whenever you receive your paycheck. The plastic cards have the highest interest rates among the many payables you can have, and thus, you really can’t afford to miss your due dates. Aside from your credit card, other financial obligations to mind are loan repayments and the money you owe to friends and relatives. Of course, there are also the rentals and utilities, among others.
Pay At Least 150% Of Your Minimum Payment
While it’s tempting to pay your monthly bills based on the minimum amount due, the sad fact is that you’ll get finance charges for the remaining balance you have. So as much as possible, consider paying more than the minimum each month to reduce the interest fees added to your remaining payables. But when making extra payments, make sure to consider how much you need for your basic needs until the next paycheck to ensure you have enough money at hand.
Stop Making Purchases You Can’t Afford To Pay
It’s a simple equation. Don’t use your card for something you can’t afford to pay by the due date. You can still swipe it though for little purchases such as groceries, medicines and food as long as you have the cash to pay them off before the due date. In fact, using your card and paying it in cash later on is a good trick when your credit company is offering rebates or reward points. Just make sure you don’t procrastinate on your payments.