Credit cards are wonderful when used sparingly, but credit card debts can reach you quickly. Learn to manage effectively, and then minimize, your credit card debt is essential to get out of the situation. Here at Good Finance we want to help with all financial matters and here are three valuable main tips to better manage your credit card payments.
If you have debts that extend to several credit cards, it is useful to first determine which card has the highest level of debt and has the highest interest charges. When you find out, you’ll know which card would benefit most from your attention. However, if you can, it is useful to pay at least the minimum on all your credit card payments, even when you are concentrating on a specific card. If you trust the minimum payment, you will never progress, especially if you continue using the card to make purchases.
Another option is to move your debt balance to a new card that offers a 0% balance transfer. This means that there will be a period in which you will not pay interest on the debt that the card carries, so that every penny you are paying is actually eliminating the debt instead of being consumed by the interest. Some cards may have a charge for transferring the balance; however, it is ideal that it be minimal: 3% of the balance transferred, for example.
When looking for cards, it is more important to focus on the “0% balance transfer” than the low APR rates, since the APR only applies to purchases. Some 0% balance transfer cards are not available to customers with bad credit, in which case look for the lowest transfer rate you can find.
It sounds simple, but having a clear vision of how much money you need to pay on your credit cards is the key, and how long it will take. It is useful to prioritize the payment of the debt: the faster the debt is paid, the faster it will be forgotten.
Consider paying your debts through direct debit, which means that it is only about making sure you have the money in your account instead of having to really remember to make the payments. This will prevent you from accruing late fees or additional interest on your debt.