As most of us know it can be all too easy to get carried away with spending when you are armed with a credit card, and whilst credit cards can be very useful, convenient, and flexible, they are also the cause of huge, spiralling debt problems for many people. Much of the personal debt mountain has been attributed to credit card spending, and whilst some people are sensible about the use and repayment of their cards many others simply spend frivolously on their credit cards, and soon find themselves up to their necks in debt.
Some people even get into the habit of paying bills – even their mortgage repayments – with their credit cards, but this is a very expensive way of paying bills because the interest rates and charges applied for such transactions can be very high. You may be one of the many people that has a number of credit cards to their name, and if this is the case then you should consider getting rid of your cards and just keeping one for emergencies.
If you have outstanding debts on your existing credit cards it may be an idea to either use a debt consolidation service or transfer all of these debts onto one 0% balance transfer card or a low interest life of balance transfer card, and then getting rid of the other cards once they have been paid off. You should avoid spending on the balance transfer card once you have transferred your debts, as this will simply rack up more debt, and any purchases that you make will normally get trapped behind your transferred balance, where it will continue to accrue interest whilst your repayments are allocated to the interest free debt.
Another alternative is to concentrate on paying off the balance on your credit card as quickly as possible so that you avoid too much costly interest charges and get the debt paid quicker. Making only the minimum repayment means that you will pay a fortune in interest and it could take years to clear your balance – instead you may want to consider paying as much as you can over and above the required minimum each month, and this will enable you to get the debt paid more quickly and reduce the amount of interest that you pay.
It is important, particularly in the current financial climate where household budgets are seriously strained, to avoid spending money that you don’t have, and this is what many people with credit cards do. Instead, you should avoid making purchases on the credit card and use cash instead – or use the credit card and they repay it within the interest free period. You should then focus on getting the existing balance repaid as soon as you can. If the temptation is too much you may want to get rid of the card altogether so that you do not spend on it – don’t just cut it up though, as it can easily be re-ordered. Instead, close the account altogether with the credit card company once the balance has been repaid.
I recently came accross your blog and have been reading along. I thought I would leave my first comment. I dont know what to say except that I have enjoyed reading. Nice blog.
Tim Ramsey