Credit cards can be a great option for helping you manage your finances. Not only are credit cards good for building a sound credit report, but they also can give you a backup plan, in the instances where you incur unintended financial burdens.
Become a pro on how to manage those credit cards!
If possible, pay your credit cards in full every month. Use them for normal expenses, such as petrol and food shopping, with the intent to pay off the balance at the end of the month. This will build your credit report and help you to gain rewards from your card without accruing interest or sending you into unnecessary debt. In order to minimize your credit card debt expenditures, review your outstanding credit card balances and establish which should be paid off first. A good way to save more money in the long run is to pay off the balances of cards with the highest interest rates. You'll save more in the long term because you will not have to pay the higher interest for a longer period of time. Most importantly, DO NOT use a credit card to extend your income.
If you get into trouble...
If you find yourself in a situation where you cannot pay your credit card bill on time, the last thing you want to do is to just ignore it. Be proactive, call your credit card company immediately, and explain the issue to them. They may be able to help put you on a repayment plan, delay your due date, or work with you in ways that won't be as damaging to your credit report. Many people get into credit card trouble because they do not discipline themselves to handle credit responsibly. It is an easy trap to fall into with the way the world promotes credit card usage also. However, you have to discipline yourself. Do not cut up all your cards thinking that will end your debt woes. It is true that stopping the bleeding is the first step, you still have to pay down the bills. It is better to get in the habit of just paying off your full balance every month. Be sure to get assistance if you're in over your head with your credit cards. Try contacting Consumer Credit Counselling Service or Citizens Advice. These non-profit organisations offer free debt advice services.
Don't stare into the light!
When it comes to credit cards, be sure that you are wary of any sort of free offers. This is important because, a lot of times, the freebies that you are offered can be thought of as traps that may lure you in and end up costing you a lot of money in the future. One of the biggest traps that people falls into is the '0% interest' offer. These offers are enticing and we never even bother to read the fine print. Then, by the time the interest does kick in, we're left with debt that seems insurmountable.
Know where you stand
If you have credit cards and your balance is in good standing, call your credit card company, and ask for your interest rate to be lowered. It is truly that simple. Unfortunately, most people do not even realise this is an option so they never make the call. Just tell the representative that you want a better rate on your credit card and they will take care of your request.
As stated earlier, credit cards can be a great thing to have, not only to help with your long term needs, but also with things that may come up in the near future. Be sure to follow the information provided in this article for guidance on managing your credit cards.
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