Getting a credit card is a major financial responsibility. While many see it as money to spent on purchases that couldn’t otherwise be made on a debit card, it is actually a line of credit that can have major financial implications.
Consistently being late with credit card payments or not paying enough monthly can leave you in a worse place financially than when you first received a credit card. If you want to become more serious about your financial health, it starts with getting serious about paying off your credit card debt. Fortunately, there are ways for you to change your mindset and begin the journey of financial rehabilitation. Here are some interventions to start implementing today.
Do Not Miss Payments
If you want to get serious about paying off your credit card, what’s important for you is to start practicing better financial habits. One such habit that you cannot neglect is never missing a payment.
Whether you are making the minimum payment or intend to pay it off in full, being tardy on a credit card payment will not reflect well on a credit score. This can also potentially impact the interest that you pay on credit card payments. You can get more information on interest rates on credit cards from experts at Wink Capital.
Paying on time will help you build a valuable financial habit, but it also directly coincides with another tip that will help you avoid such a situation.
Do Not Spend More Than a Third of Your Limit
If you want to avoid a situation where you are not sure if you are able to pay a credit card bill off in time, you can circumvent this scenario by living more within your means. This starts with only spending about a third of your credit limit.
While credit cards can be used for the sake of convenience, you must also remember that it is money that has to eventually be paid back. It’s not free money. A general rule of thumb is that if you were strapped for money in making a purchase before, it is generally not a good idea to put it on a credit card.
Only use credit card for purchases you know that you can afford. Emergencies happen, but seek out other methods of paying off certain responsibilities before resorting to a credit card.
Cut Your Interest Rate
Depending on the credit card that you have, the APR’s can potentially be as high as 10-25%. This means that the consumer debt you have may pale in comparison to the amount you’d be paying in just the interest on your credit card debt alone.
High interest charges will make it difficult to pay off credit card debt at once, and that’s not even incorporating the factor of your credit profile. Getting a lower interest rate will help you expedite the process of paying off credit card debt.
You can call a creditor and ask to see if a lower interest rate is on the table. You can also explore a balance transfer where you get a credit card with a 0% interest rate and transferring the existing balance to your new credit card. You can check out pertinent information on interest rates on credit cards by getting valuable information from Wink Capital.
Follow these three tips, and you will see an instant change as to how you will be able to go about paying credit card debt