Credit card debts can be a nightmare to a person because it greatly affects many financial aspects of one’s life. If you’re someone dealing with the same kind of problem, be sure to check out these important tips and advice for you to be able to relieve yourself of these debts.
The situation wherein a person gets into debts is very common and credit cards are very easy to acquire which makes trying to keep out of debts more complicated.
Are You Over the Limit?
Table of Contents
Spend time to check and understand your card statement. Should you be dealing with a 15% monthly payment to your card from your salary then it is time that you do something about it.
If you are simply paying the minimum payment, it wouldn’t actually do much in paying off your bills since the accumulated interest charges can eat up the monthly payments every time.
As a way of example, if you pay $50 per month, check your statement regularly and monitor your actual interest – does it really make any difference?
Paying the Minimum is the Road to Nowhere
If you’re making minimum payments for your card, you will be dealing with a lot of interest charges through the years. Back in days gone by, many companies ask up to 5% as a minimum repayment from their clients however some companies today are now asking 2% since many clients are unable to manage a 5% minimum payment scheme.
Although it would sound convenient to pay lesser per month, the interest charges actually build up the longer it takes to pay the principal balance of the debt.
Follow These Hints
Here are a few tips and some advice on how you can get away from being buried by your credit card debts. First thing is, stop using your card and always check how much you are spending. Cut it up if you can’t help yourself. Balance transfers could also be a good way to save money, however, you need to opt only for those with 0% interest fees which go for at least 6 to 9 months, or even more.
With this, you will be able to manage your finances more conveniently. Be careful though, if you don’t pay the balance off prior to the O% term expiring the interest rate is going to shoot up.
Debt transfer to a card with lower APR
As soon as you’ve paid off your debt with a card with a 0% interest fee, you don’t have to stick with it for your future expenses and card uses – you can always move on to using another card which has a better offer with terms that you can provide you with more comfort and convenience.
One thing that you just need to be aware of is the schedule of payments, since delays would definitely be costly in terms of card repayments on any remaining balance.
As soon as you have a better situation with your finances, your next move should be to totally eliminate debts in your account.
A careful and sure-fire way to do this to first clear those debts with high APR – pay more than the minimum for debts with high APR’s and pay just the minimum for the rest of your debts. As soon as you finish paying off those cards with high APR’s, you can then proceed with the next.
Credit Cards are Very Flexible
There are so many things that we can do with a credit card – however “with great power, comes great responsibility.” If we are unable to attend to our monthly payments, we will be sure to acquire a huge amount of debt out of our credit cards – unfortunately, paying such debts could take years if not done properly.
What to bear in mind….
1. Think before you use your card
2. 0% balance transfers could offer help in debt payments (use intelligently)
3. Debts with high APR’s should be prioritized
As soon as you get your debts under control, your next step would be to monitor your expenses and totally eliminate your debt. To avoid getting in the same situation in the future, always refer to the tips mentioned in this article and enjoy financial freedom into the future.