Like many, if you too are battling with the trouble of getting your credit card balance under control, it is time to moderately tweak your spending habits to regain control on your finances. Planning your expenses right not only keeps you aware and prepared for any additional expenses that you may incur but also helps you enjoy a stress free life.
These simple steps will help you keep a tab on the existing credit card over dues and stay debt free:
1. Pay more than the minimum balance – While paying a minimum amount of ₹ 100 – ₹ 200 may appear relaxing especially when you’re under a financial duress, it is advised to not get tempted. The truth of the matter is that you will never pay off your bill entirely and credit card companies will earn interests on the balance by imposing high interest rates. This will eventually keep your bill growing. Thus, it is a good idea to pay off a large sum that you can afford by reducing or reallocating your finances in that month.
2. Spare your credit card from using them for daily necessities – Except for exigencies; you should be able to manage your monthly necessities with your steady source of monthly income. It is also a great way of keeping a check on our monthly budget. You may look at it this way – Consider that you buy 1L milk every day at ₹ 40 on credit card. This instantly translates to ₹ 1200 on your credit card if you do not pay it off immediately by the end of the month.
3. Stay away from Credit Card Rewards – More often than not, credit card holders get swayed by the reward bonuses that they earn on accruing certain points. Beware of such schemes since earning a nice perk or similar rewards are worth far less than the extra interest you will accrue if the bills are not settled by the end of the month. It is widely observed that the credit card reward schemes that allow you earn points on your credit card purchases often come out to a reward of 2% or less. For such an insignificant reward, it is not advised to incur increased expenses on the credit card.
4. Avoid multiple credit cards – It is not advisable to sign up for multiple credit cards irrespective of the sign-up bonuses that the credit card institutions may offer. If your finances are likely to depend upon credit options, multiple cards is not your cup of tea since you know you’ve difficulty managing one card. So, do not fall in to the temptation of owing multiple cards since it will only increase your financial liabilities and affect your credit score.
5. Avoid paying your medical dues with credit cards – If you’re not insured medically, the medical bills can be awfully expensive. If you’re unable to pay off the bills, try to negotiate the terms of the payment with the hospital authorities and settle for a suitable solution. Try not to pay off your medical dues with your credit card since it is only going to add on to the bill and stress by adding enormous interest rates.
Once you’ve learnt the ways of handling a credit card account, it is easier for you to manage and allocate your expenses judiciously without falling into fancy temptations and needless pressures. While cleaning the debts takes time, what is essential is to exercise self -control that helps you using credit cards as a convenient tool sensibly and responsibly.