Fact: US credit card debt will surpass $1 trillion this year!
How do you manage your credit card? Clearly, when it comes to spending money, exercising a level of discipline is important. But some people seem to have a “see and spend” attitude when it comes to using a credit card. They see something and they purchase it, without even thinking of the consequences.
Having that kind of mindset towards using a credit card, can get you into debt and wreck your credit rating. So here’s my unique take on how to manage your credit card and have a really fantastic credit rating. It’s what I actually do, to manage my credit card payments and the tips are really easy to follow. But before we get there, here a few facts you NEED to know.
In all fairness, having a credit card is great; it’s convenient and it can come in handy in emergencies. But whether you’ve got a Discover credit card, one from Macy’s, Best Buy, or some other credit card, using it wisely is important.
If you’re not careful to manage your credit card appropriately, your credit rating can be negatively affected and a bad credit rating can make acquiring certain things very difficult. You don’t want that to happen to you now do you?
According to the latest Federal Reserve report, credit card debt in the United States is currently $8,038 per household. Translation? That’s about $940.2 billion of debt! I hope that statistic does not include you. But it doesn’t end there, as Wallethub estimates that US credit card debt will surpass $1 trillion this year. Man, oh man!
How do You Manage Your Credit Card?
Here’s my unique take. This is actually how I manage my credit card, so I have no problem what so ever, when I want to get a loan. Which really isn’t that regular but it comes in handy for purchases like a new car, when you don’ want to spend all of your money up front. Know what I mean?
Now, if you need more than the tips provided here, I’ve also included some resources you may find extremely helpful. So here are my eight (8) quick and easy tips to help you manage your credit card and protect your credit rating:
1. Exercise some restraint
I know it’s difficult, but you have to resist the temptation to spend, spend, spend! Your credit card is not an opportunity for you to spend money all willy-nilly. Remember whatever purchase you use it for, you have the repay that money.
So a good strategy would be to use it to purchase the things you need, as opposed to the things you want or desire. We all want stuff, but what good is it, when you’re digging yourself deeper into debt the have it?
2. Pay on time
You are not doing yourself any favors by paying your credit card bill late. All you’re doing is putting yourself in more expense.
When you pay your credit card bill on time, you avoid having to pay late fees. Over time, those late fees add up to a pretty decent chunk of change, which you could have used for something else. If you’re one of those individuals who forgets, and always have the pay late fees, then try putting payment reminders where you know you’ll see them.
3. Pay more than the minimum payment
The minimum payment looks small and affordable, doesn’t it? Well, that’s exactly what it’s there for. But don’t be fooled by it.
Depending on the amount you owe on your credit card, it could be a while before you actually pay it off, if you’re only making minimum payments. While you’re paying a little, the interest that is being tagged on, adds up to be quite a lot! So make sure you pay more than the minimum payment, to avoid paying exorbitant amounts in interest.
4. Cover the entire payment if you can
If you can cover the entire amount on your credit card bill, then do that. The longer you take to pay off your credit card, the more interest you’ll pay.
The more you pay towards your credit card, the less interest you pay, so if you can manage the entire payment, you’ll save yourself the additional expenditure in interest. If you are using your credit card solely for the things you need, then that’s money you would have had to spend anyway. So a good strategy would be to set that money aside to cover your credit card expense.
5. One credit card is enough
Come on now, do you really need two or three personal credit cards? If you can’t afford one, then you definitely should not take out another.
Every so often you might want to splurge a bit, and that’s understandable. But if you know or think that your spending might get out of hand, then make sure you have a budget and stick to it. This way you can avoid overspending and getting yourself into hot water.
7. Monitor your spending
Monitor your credit card use and spending so that you don’t go overboard. In addition to which, identity theft seems to be a bit rampant these days. So it’s a good idea to keep track of how you’re using your credit card, so that there would not be any surprises when your bill arrives.
8. Don’t fall for the credit card competitions
Sometimes, credit card companies have these competitions going where you can “win all your purchases free for a month.” Of course the more you spend, the better your chances. But that’s like the lottery; enticing but difficult the accomplish. So why put yourself in debt, hoping the win something you most likely won’t?
If you can manage your credit card appropriately, it not only helps with a positive credit rating, but it can also help you to become financially independent as well. It also helps if you cultivate good saving habits as well.
There you have it! Eight quick and easy tips to manage your credit card. I’ve also included some fantastic resources below that I think you’ll find extremely helpful. Hey, if you’ve got a tip or strategy that I didn’t mention here, please feel free to share it with us in the comment section. Looking forward to hearing from you!
By the way, if you’re interested in learning how to make extra cash from home, then come talk to us.
Until next time. Stay well.