Credit Card Debt and Personal Finance
Many people have a love-hate relationship with credit cards, while they make it extremely easy and convenient to purchase items at the spur of the moment, they can come back to haunt you later on with high interest rates and late fees for your credit card debt. Here are some tips on how to manage your credit cards.
Choose Your Credit Cards Wisely
Many people think that it is a game on how many credit cards they can have in their wallet, unfortunately, the more credit cards in your wallet usually means two things: the more debt they have and the lower their credit score. Don’t be fooled, having more credit cards is not beneficial for you, in fact it can be harmful to your personal finances. Usually only have two or three credit cards max. In addition, you will always have your debit or ATM cards, so you are safe in case of most emergencies.
Pay Off Your Credit Cards ASAP
Even if you have a credit card with a low interest rate, the more time you wait to pay off your balance, the more money you will owe. You would never pay $20 for a hamburger at a local restaurant, but that is in essence what you are doing when you do not pay off your credit card balance for months and months at a time.
Buy Only Durable Goods with Your Credit Cards
Two things you shouldn’t buy with your credit card are food and gas. The reason being is that you use up these products immediately. You do not want to be paying off debt for months and months for items that are no longer around. However, if you buy a TV with a credit card, it lasts longer and it is a little less to stomach that you are paying it off for a long period of time.
If you fall into credit card debt, before it is too late, dig yourself out with a credit card consolidation loan. A credit card consolidation loan is a loan that pays off all your credit cards leaving you only with one payment per month. Now that you only have to focus on paying off one loan instead of several cards, your interest rate fees should be lower and your monthly payment should be lower as well. In most cases, you can save anywhere from $50 per month to several hundred dollars per month just by consolidating your credit card debt.
