You’ve made the decision to get on top of your credit card and on top of your credit card debt. But starting to tackle the debt, and the way you approach your credit card, is a big task. Here are some tips so you are the one who ends up back in control.
Paying the minimum repayment per month is never really going to get you anywhere except treading water. Make your credit card repayments a major priority and pay above the miniumum rate every month. The best way to do that might be to set up automatic deductions from your bank account on a weekly basis. It doesn’t have to be a huge amount, $50 a week will start to take big chunks out of your debt after a while. You’ll also save big money on interest and, if you are anything like me, will avoid the late fees that come when I forget to set aside the amount for my credit card repayment.
So much of our problems with credit has to do with behavioural patterns. We’ll go out for dinner when we actually can’t afford, and put it on credit. It’s easy, painless and can hardly register in the midst of everything else that’s going on around us. Until the bill arrives of course and we are left gasping for air. The only way to mitigate this is to get far more conscious of the way we spend money. Checking your credit card bill every month to make sure there are no extra charges on there is the first step. Tracking how you use your credit card throughout each month will, in all likelihood, be fairly illuminating. Once you know what your patterns are, you will be more able to change them and save money.
Get On Top
Transfer all your balances onto one credit card, preferably the one with the lowest interest. Cut all the others up- I know people who have concerns about credit ratings don’t necessarily think that’s wise, but anyone who struggles with credit card debt will agree it is a necessity. Make sure there are no nasty surprises waiting for anyone who transfers their balances, and set up a payment scheme on the one card- it will be far easier to stay on top of than many.
Cancel The Kid’s
My parent’s were never so foolish as to offer me a credit card, I quite easily dug that grave on my own terms. If, however, you’ve been generous and offered your children credit cards for ‘necessities’, it may be time to let them get them on their own terms. If your kids need a bit of help, give them cash. Or set-up a repayment scheme that your child must stick to- the most dangerous thing can be to fall under the allure of a credit card without any of the commensurate consequences, so stand firm.
The Right Path
Fixing our credit can be one of the trickiest and longest roads, but never is one more worthwhile. It’s a matter of chipping away until you get on top of the whole process. If you decide to still use credit cards, make sure you continue to monitor your spending and always clear them by the end of the month.