The credit card is a hand in the wheel when making payments, combining practicality with some advantages, such as the possibility of splitting amounts, for example. However, you need to be careful and use the card sparingly so you don’t end up in debt.
It is not uncommon to meet people who end up getting tangled up with credit card debt and committing themselves to expenses that they cannot afford, and that seems to have no end. To avoid this situation or solve the problem, check out our tips today:
Learn how to use the card
When using the card, always keep in mind the percentage of your budget that you can commit to that expense and what is the amount to be paid in that month, in full. Making only minimum payments is the first step towards building a debt that can seem priceless in a short time!
If possible, always keep a record of the expenses of the card for your own control, establishing and respecting a monthly limit for its use. It is not because the card offers a limit of 3 thousand dollars that you need to spend all this amount, especially if your budget does not include such debt.
Review your spending
Once in debt, try to cut superfluous or not-so-essential expenses from your monthly budget to save enough to pay off your debt. Card interest is usually calculated at very high rates and is levied on themselves, which leads to the famous snowball.
Despite prescribing in 5 years, the idea is that the client does not wait for the time to pass and settle his debt with the card as soon as possible, avoiding possible constraints and lawsuits. Making a temporary sacrifice may be enough to get the accounts back in order.
If expenditure restraint was not enough, it may be interesting to negotiate the debt. A good alternative is to try to divide the debt into fixed installments that fit your budget. Always keep in mind that negotiation is an exchange of proposals and that you are not obliged to accept the first one that you are offered. Always look for the best conditions so that you can pay off your debt.
In case of varied debts, observe the interest
If you have debts on more than one credit card, note the interest rates charged on each one. We are often led to think that the settlement of the lower-value debt should be the priority, as that would end that issue, leaving it focused only on the larger debt. However, the focus should always be to pay off the debt that charges the highest interest rate first, as it is precisely this rate that makes the total debt grow.
Even consider looking for a personal loan with better terms, lower interest rates. This is the case of Lite Lending, for example, one of the partner institutions of Good Lenders Credit that you find within the application.
Don’t use one card to pay another’s debt
When using a credit card to pay another one, you are only changing the debt of hands, but staying within the interest charged by administrators and which are usually calculated based on the highest rates in the market.
Exchange the debt for a smaller one
If you plan to choose to take out a new debt to pay off your card debt, keep in mind that you need to make an exchange that is advantageous in terms of interest. Look for loans in the market that cover rates lower than what you have already paid and request the amount needed to pay off all debt with the card. You will continue to owe the same amount, but with lower rates, which may facilitate your payment.
A very useful credit tool, the card becomes the villain of many households by giving rise to astronomical debts. Following our tips, you will be able to resolve your credit card debt as soon as possible and get your financial life up to date! Have you had problems with your credit card? How did you solve the situation? Comment and share your experiences with us!