Tips on Avoiding Huge Credit Card Bills
Credit card debt is one of the biggest problems that cash strapped Americans have are facing today. With salaries taking a beating and uncertainty about jobs preying on their minds, many Americans use their plastic to buy things because they do not have to pay for them right away.
Although users conveniently forget that credit card balances have to be paid off sooner or later, the issuers don’t forget to send the bills at month end. Instead of running up huge bills on your plastic that will wipe out your entire savings to repay, it is far better to keep a check on how you are using your card.
Monitor Your Card Spending
A great way to ensure you always have the cash to pay back credit card dues is to keep a list of purchases that you make using it. Update the list diligently whenever you use the card so that at month end you know exactly what you owe to your credit card company. This list will also help you detect any errors in your billing.
To further strengthen your monitoring system, you can have a separate account where you keep a certain fixed balance every month to pay off your credit card bill. Never, ever overshoot the amount in this account with your card purchases. This sets a clear budget for you to stick to and makes sure that your credit card spending is limited to a manageable level.
Compare Offers to Find Better Deals
Just like any other financial product, different card issuers offer different terms of use and rates on their cards. If you find your card unmanageable, see if you can transfer to an issuer offering a better rate. Factor in cancellation charges and fees that will apply on your current card. You can also try negotiating with your existing issuer if he will offer reduced rates to retain your account.
Avoid Using Credit Card as Cash
Wherever you can, use cash or your debit card instead of your credit card. Neither cash nor debit card will present you with a bill at month end and you are also limited to the actual amount of cash in your account when you use them.
A credit card should be used only when you need to make an emergency critical expense, say, buying gas for your car when you are miles way from home and don’t have your wallet. It can be used as a substitute for cash when you need to make large purchases and want to avoid carrying cash with you. In such case, set aside the money you expect to spend in your special credit card account before you go out shopping.
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