Credit cards. For some, they’re a dirty word. For others, they’re nothing more than a convenient way to transfer money and build a credit rating. It’s crazy how the same thing can have such different meanings. And, often, it doesn’t feel fair. Why has your credit card journey led you to nothing but trouble, while others ride this wave unscathed?
There is a multitude of reasons. To a certain extent, the way you see your credit cards all depends on what motivates you. For example, people who want to simply build a credit score seem to get along much better than those who want to make large purchases. Not to mention that your credit journey can soon turn into a horror story if you already have debt behind you when you delve in.
But, irrelevant of all that, it’s possible to ensure even the worst horrors have a happy ending. All you need to do is read on, and consider whether you’ve made any of these credit card mistakes.
Spending when you have no chance of repaying
The main mistake many of us make is to assume that a credit card is free money. We see that maximum amount, and dollar signs come into our eyes. Oh, the possibilities! Suddenly, all those expenses you’ve been holding off on might seem possible. In truth, though, your maximum budget shouldn’t even enter your mind. Getting anywhere near it is a sure sign that you’re letting yourself spend amounts you can never repay.
The main thing to remember is that a credit card is NOT free money. Anything you spend, you’ll need to repay. What’s worse, the longer it takes, the more expense it’ll be. Before you know it, debts will come at you at a fast pace.
To make sure it doesn’t happen, remain realistic. Yes, your card is an excellent way to spend what you don’t have just yet. But, you need to know that you’ll have that money by the time your bill rolls around. There’s nothing wrong with sticking something on your card a few days before you get paid. In fact, this is the real beauty of the method. But, keep the amounts small. A meal out, or a food shop is all it takes. It can help to develop a rule where you only stick the essentials on your card. That way, you won’t fall into the overspending trap.
Only paying the minimum each month
Banks are businesses. Thus, they want to make money. As such, they offer the chance to pay only a minimum amount of your bill back each month. But, if you choose to do this, you do face interest payments. Plus, it can become increasingly difficult to keep track of what you’ve spent, and the total sum you owe. And, that way leads to trouble. Spending anything on top of your debts could have a disastrous impact without you even realizing.
By comparison, setting up a direct debit for the full amount saves you on interest payments. It also ensures your debts don’t start snowballing. This is best all around because once the debt ball gets rolling, it’s never easy to stop. This is also a sure way to avoid the overspending we mentioned above. After all, you’ll know that you need to pay the full amount by a set date, or face ramifications. So, you won’t get stupid with your spending quite so freely.
Taking out multiple credit cards
For the most part, no person should need more than one credit card. That’s all it takes to build your rating and ensure you have a reserve for emergencies. Yet, it isn’t unusual for people to take out more than one card. Some even use those other cards to pay off their original debt. But, rest assured; this is a sure way to trouble. This is no way to clear a debt. In reality, all you’ll do is scatter money in different places, and make things harder to keep track of. That snowball which started when you first found yourself in trouble will begin speeding down your credit hill. Before you know it, you’ll be bowled over at the bottom.
If you’ve already made this mistake, there are options for you. Debt consolidation loans, like those found at www.DebtConsolidationLoans.com, can help you get on top of the situation again. But, it’s best to avoid the issue altogether if possible. As a rule, it’s never worth getting out another card to pay your debts. And, if you follow the above pointers, you won’t be in a position where you have to. If you do find yourself in the situation mentioned above, it’s a sure sign that you…
Didn’t ask for help
Many people who face credit card debts struggle to ask for help. It’s understandable. Matters of money are always tricky to broach, be it with your bank or a family member. But, as you can see from this article at http://jayperoni.com/if-you-want-the-key-to-stable-finances-then-dont-be-afraid-to-ask-for-it/, it’s important to ask for help if you want stable finances. This is certainly a preferable move to taking out more cards and getting even further into debt. The moment you notice yourself getting into trouble, reach out to people who can help you. If you don’t think you can make a payment, contact your bank and see if anything can be arranged.
Honesty in these situations is always the best policy. If your debts keep building and building, however, you might want to ask a family member for a loan. By going down an official route, you can save yourself any feelings of guilt here. And, best of all, family members rarely charge interest. Taking the pressure off in that way can be a massive help towards wiping the credit slate clean. If you do take this route, though, it’s crucial to consider what you did wrong, and how you can avoid it next time around. While asking for help is essential, it isn’t fair to do this time and again.