Do we really need a credit card?
Amidst this very uncertain economic situation, definitely YES.
Contrary to what many people portray, credit cards are helpful when used wisely. Credit card has a better protection against fraud, compared to a debit card. It also helps raise credit score and you can also save a hundreds or even thousands of dollars a year from rewards and cashbacks. Going cashless with a credit card gives people lots of convenience and huge benefits depending on how they use or spend it.
According to data, more than 191 million Americans have credit cards and their average credit card balance is around $6,200.
Having this huge amount of balance is okay if you pay your credits off each month, but if you can’t, then you have a huge problem and you need to know how to minimize your credit card debt.
· Decide the purpose of your credit card. You can’t use your credit card only to splurge. You must use it for better purposes such as paying for your monthly rent or mortgage, buying for essentials and other important things for your daily life or for your business. Credit cards aren’t used for flexing, if you are doing that then get ready to face more debts that you can no longer handle in the future.
- Check your spending habits. Your card should match well with your spending habits. A lot of credit cards give bonus rewardspoints for certain kinds of purchases. Choose which kind of purchases fits your lifestyle then maximize the rewards you can earn. But always make sure that when you maximize these rewards, you can also pay off your monthly credit card obligations. The rule of thumb to manage your credit card debt well : do not live beyond your means. It means you spend at least 20% or more for your savings.
- Check the interest rates and pay off highest-rate cards first
If you have more than one credit card, you should pay off the ones with the highest interest rates first, than paying the one with the lowest balance first. It can save you money and can eliminate your debt quickly. Once that happens, try to save only one credit card for yourself so you avoid having too much debts.
- Double the minimum payment. Paying the minimum is enough to cover the interest on your account so you won’t fall behind, but it doesn’t get you much closer to eliminating your debt. Make a huge impact on your credit card debt by paying double every month. You would save big in interest and you’d be able to get out of debt in just a few years later.
There are many different credit cards out there and most of them are enticing at first but will put you in grave debt in the long run. If you need help with your credit card debt, click here.
Nearly every purchase nowadays are on a credit card. It has been a way of life. But one of the best ways to deal with your debt is to transfer your balance to a 0% credit card, but it is usually offered to those with high credit scores. Now, if you are serious in minimizing your debt, better work your way up for a better credit scores by paying your debt on time.