How to make one’s credit card work?
Credit cards are quite a convenient way to pay for the things one wants, but this convenience can come at a cost. It’s recommended to avoid costly fees and interest by following these tips.
The smartest way to use a credit card is to keep track of ones spending. Use any app to help manage the expenses, and make sure one regularly checks on one’s credit card statement.
Pay the credit card on time:
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When one gets his or her credit card statement, one must check if the date of the payment is due, and make sure one pays on time. This helps in avoiding extra interest charges and hefty late payment fees.
To make it easier, one must consider setting up a direct debit for paying a fixed amount off the balance owing each and every payday.
Maximize the credit card repayments:
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If one only makes the minimum repayments on his card each month, he would have to pay a lot of interest and it could take years to pay off one’s credit card debt.
It’s recommended to use the credit card calculator to work out in the fastest way to pay off ones credit card.
Credit card calculator:
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If one is struggling to pay more than the minimum monthly repayment, just consider switching to a card with a lower interest rate, and pay off more when one can. If one switches again, kindly make sure to close the old card so that one doesn’t wind up with more debt than before. Find out more about credit card balance transfers.
It’s advisable to work out on how much time and money one saves by making higher repayments on the credit card using a credit card calculator.
Set a sensible credit limit:
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The credit limit should be an amount one knows one can easily repay, and an amount that in no way would tempt one to spend more than one can afford.
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If one cannot afford to pay off the balance each month, then don’t increase the credit limit. A higher credit limit, at times, makes it too easy to get into more debt.
Reducing the credit limit:
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If one wants to avoid the temptation to overspend on his card, just ask the credit provider to reduce the credit limit. One can do this by phone or by visiting a branch. From 1 January 2019 onwards, one will also be able to reduce his credit limit through online. In most cases, the account will be updated within 1-2 business days.
Invitations to increase your credit limit:
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Credit card issuers are not allowed to send invitation in order to increase one’s credit limit in any way (including phone or online) – even if one has previously opted to receive these offers. This does apply to both the new and the existing credit cards.
One can always ask his card issuer for an increase in his credit limit at any time.
If one needs to increase the limit in order to make a special purchase, just aim to pay the debt down quickly, then lower the limit back to a more manageable amount.
Don’t use credit to make ends meet:
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In case, an unexpected emergency happens, or if one is just running low on cash before payday, using the credit or taking a cash in advance is not going to work in the long run. It might help get one through the immediate crisis but, over the course of time, one will end up under even more debt.
There are lots of guidance to help if one is having problems paying debts or dealing with these types of bills i.e. mortgage, fines, phone, gas, water and electricity bills and lastly, travel debt
To get free and confidential debt help, one is recommended to see a financial counselor who can help sort out the debt issues and reduce relying on credit cards.