Your First Credit Card
A lot of us tend to overdo it, when we get our first taste of plastic. When you get that first credit card, you convince yourself you’ll only use it for emergencies. Then a long weekend pops up and you’re invited away before payday, so you decide to just go ahead and treat yourself.
You’ll pay it back, right? But, what you don’t realise is you’ll be paying back a whole lot more over a much longer period of time if you charge it to your credit card.
Credit card debt can ruin your life if you let it. You don’t want to wake up one morning and realise you have destroyed your financial future for a few getaways, some fancy threads and other meaningless material things. So, take advantage of these tips on how to stay on top of credit card debt.
Choose Wisely
Leave the credit card at home whenever possible and pay with your bank card instead. Especially when going to shopping malls, restaurants or bars. If your bank card balance won’t cover a vacation away, the wise choice is to sit this one out.
How are you supposed to relax when you’re racking up all that debt, anyway!? It’s tempting to just throw caution to the wind and charge it all to the card. But you’ll end up with nothing but regret and crushing debt. Is that really the life you want for yourself?
Pay More than the Minimum
It may be tempting to merely make the minimum payments you are required to pay monthly on your credit card at first. But, remember, the smaller your repayments, the longer it will take you to pay off your credit card, and the more interest will pile up.
Moreover, don’t fool yourself into thinking your interest rates will remain low because they always go up as time goes on. When it comes to credit cards, you are always going to end up repaying a lot more than you borrowed. So, at least, try and keep the amount you borrow to a minimum.
Don’t Spend What You Can’t Afford to Repay Next Month
If you urgently need to buy something or want to attend a rare event that means a lot to you, but payday is still a few days away, you can use your credit card as a once-off treat. However, you should only do this if you can afford to repay this amount in full on payday, without running into financial trouble.
Strictly for Emergencies
Before you charge anything to your new credit card, you need to have a strict definition in your mind of exactly what constitutes an emergency.
What is worth getting into debt over – doctor’s appointments that your medical aid doesn’t cover? Repairs to your car? Prescription spectacles? Decide what you can really justify using your credit card on at the start and commit to only using it in emergencies.
Debt is a pandemic and people all over the world are depressed and in over their head because of it. Don’t become a statistic.
Pick Your Repayment Day Carefully
Determine when the best day to make your monthly credit card repayments is. When is your payday? When are your bills due? Choose a day in the month when you know you will have money in your account.
Even with these tips, remember that accruing a lot of credit card debt will only end in disaster. You may not be required to pay up your credit card in full all at once, but making bigger payments will boost your credit score nicely. Just as picking a good day to make credit card repayments will help you avoid spending this money and putting your financial security at risk.