Credit cards are a great way to tide over your monthly expenses should you need anything. The deferred payment system and monthly installments make it easier to have some breathing space. Sadly, a lot of consumers and customers tend to go overboard. Excessive spending or reliance on credit cards for expenses can prove damaging. We don’t realize it and we get caught in a cycle of never-ending, crippling credit card debt. Consumers blame banks and financial institutions for charging interest when it’s their fault for not understanding the concept of credit cards in the first place. According to reports and studies, an average American family has a credit card debt of $7,000 or higher. The number indicates how consumption and materialism dictate our lives and bad spending habits can harm our savings.
Are you tired of having a credit card debt? Do you want to cut down on spending? How can you manage to curb?
There are some simple and manageable tips, and ways to clear your credit card debt faster. Read on to find out-
Instead of blindly using credit cards, take a moment to consider. Do you need to be charging this? Can you use a debit card instead? Leave the credit cards at home when going out drinking or partying. If you have only a limited amount, you won’t overspend. Use credit cards for emergencies or when you are waiting for the paycheck. This will curb your spending to a great extent.
Why do you need 2-3 credit cards? A higher number of credit cards guarantee you will be using them and ending up with higher debt. It will get complicated keeping track of billing cycles or interest rates. For families, stick to 1 card per adult or a single credit card for the entire family.
Please don’t pile up bills or monthly statements in a corner or drawer without checking. Banks now send e-statements so you can check via email for suspicious charges or transactions. Always double check your balance and charges levied. Call the bank regarding any doubtful charges or dubious transactions.
Lower the credit limit
Your banks and institutions will happily offer you high credit limits. Should you be taking it? You can ask banks and services to reduce the credit limit starting from your next billing cycle. Lowering the cut-off amount can lower interest rate and spending.
Pay off one card at a time
If you do have more than one card, the smart move would be to pay off one card at a time. Say Card A charges you 5% interest and Card B charges you 4% interest, you should be aiming to pay off Card A. Make minimum payments towards Card B or the card with the lower interest rates. Pay as much as you can monthly or weekly towards Card A. This will also mean you pay less in interest.
More than minimum
Paying just the bare minimum monthly would just keep adding to your interest and final amount due. Interest rates are charged daily and keep getting higher. For people who are cash strapped or have no finances, it is okay to pay the minimum amount due. But if you can move or allocate funds, try paying extra or weekly instead of the monthly minimum. Your credit cards will be settled in no time and you will be debt free! Be regular- Paying the minimum or amount due regularly will benefit your credit. Banks will see you as a credible and trusted customer. You can convert this equity by asking for lower interest rates or better deals. Banks and institutions are eager to retain loyal or regular customers. Chances are they will work with you or negotiate if you ask for some reprieve.
Automate the process
Instead of manually tracking your billing cycle or paying bills, set up automatic payments. This frees you to focus on trying to free up your debt and maintaining your credit score. Every bank now has an app or you can set up automatic payments through your bank. Paying on or before the due date can also save you from late fees or charges.
Credit cards were made to facilitate our lives and expenses not to bind us to debt. Smart, savvy, and practical consumers can use these ways to get rid of your growing credit card faster.