It’s the beginning of the year! With new beginnings, new resolutions naturally follow. We can bet that for some of you, one of those resolutions involves a credit card bill settlement. We all know that the racking up of Credit Card bills has put many people in debt. We’re here to put the focus on managing your Credit Card debt, with these five helpful tips.
Shredding your debts to nothing starts with a few basic mantras.
1. Unleash the power of knowledge:
Are you aware of how much you owe and to whom? Make a list the old-fashioned way.
– Number of credit cards you have.
– The outstanding amount and annual percentage rate of each card.
– How long will it take to pay them off and how much is lost on interest?
We aren’t trying to make you break into a sweat but instead, to help break the hefty boulder that is your Credit Card debt, into small manageable pieces.
2. Reduce Your Annual Percentage Rate (APR):
“Can one do that?” you ask. Well, you won’t know unless you call up the bank and ask, right? You could end up saving a tidy sum, if the APR is reduced.
3. Budget, budget, budget:
Make a list of your basic requirements and use your resources to pay for these. Try to cut corners and save a few hundreds, whenever you can. Make use of vouchers and take advantage of sales. Remember, many tiny drops make an ocean. Once you’re debt-free, you can indulge in the occasional shopping spree and be guilt-free when you do.
4. Do not stick to the minimum:
By doing this you are making more money – not for yourself but for your Credit Card provider. Work out a system where you pay off more than the minimum amount due on your card. If you manage to spare even an extra Rs. 100, it will be worthwhile. A tad extra every month and you will be debt-free sooner than you know.
5. Cash is King:
If you’re the type of person that swipes your card until its limit is reached, it could be because the credit line is not exactly visible. We’re not saying that the credit line should be a Damocles sword hanging over your head, but how many of us are disciplined in enough to remember that it’s always there? Instead, try using cash for your purchases. You might find that it’s harder to spend case, especially when you feel your pockets getting lighter.
The timeless mantra, “Borrow only what you can repay…” holds good anytime of the year and under any circumstance. It would do well to keep this in mind when using your Credit Card.
So, if you’re prepared to be a responsible Credit Card user, BankBazaar can help find the right one for you.
Additional reading: How to be a responsible Credit Card user