How To Manage You Credit Card Wisely In Seven Easy Steps

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While it is true that credit cards come in a handy when we are caught cashless in certain instances; it is also wise to take note of the fact that excessive use of credit cards will only lead us straight down the drain of having a bad credit history. It is imperative to be wise in using credit cards and managing our debts associated with them so we do not find ourselves in trouble in the long run. It is easy to acquire debt by charging purchases and bills to your credit card, but getting out of that debt and paying it back can be a lot harder. Here are some tips to help you manage your credit debt wisely:

1. Use just one card

While different lenders offer different benefits and it is so easy to sign up for more than one card, avoid doing it unless you know you have the means to pay off each card. The problem with having multiple cards is people fall into the trap of using a cash advance (which incurs a higher interest rate) to pay off the debt of another, putting you in a horrible debt cycle. Rid yourself of the hassle of managing multiple accounts and keep it simple with one card, unless absolutely necessary.

2. Pay off your monthly balance in full

Whenever you’re tempted to use your credit card, remember the golden rule: charge only what you know you will earn before the next bill is due, so you can pay your balance off completely and avoid the interest that outstanding balances attract.

3. Investigate other loan options

If you find yourself using your credit card as a default payment option for your expenses, talk to your bank about the possibility of combining all your debt into one, lower interest personal loan that you can pay off slowly.

4. Calculate how long it will take you to pay off all your debt

If you really have no other option but to pay off the minimum amount required each month, grab hold of your calculator and work out how long it’s going to take you to get your credit balance to 0. Working out a practical plan of attack (with timelines!) will help put your debt into perspective and remind you not to charge more on your card than you can afford.

5. Read the fine print about much you’re getting charged

Be cautious of cash advances and don’t fall too easily for the “interest-free” days. It sounds good on paper, but keep in mind the benefits are sometimes forfeited if you have’t paid off your balance in full.

6. Always keep the fees down

You must learn when to use your credit cards and avoid getting hooked with unnecessary swiping; this way, you will end up paying a lesser amount on your monthly dues. You must always pay in full and on time to avoid extra charges.

7. Look for other alternatives to pay

People nowadays have the option to pay over the phone or online. This may actually be cheaper compared to paying over the counter.

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