Credit cards are a smart way to fullfil your financial needs as they help you a lot when you are going through a severe financial crunch. Apply for Credit card allows you to purchase things on a credit instantly and pay on a later date before its due date. But make sure you know about these cards and control yourself while using it. and allow you to afford as much as needed money. But you need to control how to use these cards wisely.
Given below are ten smart ways to avoid debts of credit cards and manage the card amount:
- Pay off debts with the highest interest rate first: This is applied when you have debts on more than one credit card, people often prefer paying the shorter due dates first then the longer ones. But indeed it is a wrong practice, and one should first clear the higher dues first then, the shorter ones. It, in turn, reduces the total interest that has to be paid.
- Pay more than the minimum amount: People having cards generally think of paying the minimum amount only which locks the borrowers in endless debt spirals because of the mounting debts. The rates of interest of credit cards are very high, so you should always keep in mind that if you pay just the minimum amount, it will increase your outstanding amount at an exponential rate which will be problematic for you to pay back then.
- Consider balance transfer facility: If you follow the above fashion you will be caught in a debt spiral or debt cycle. In such a case the only and the best option available for you is to get your balance transferred from one card to another card.
This facility also allows you to transfer a balance from multiple cards to a single one so that you are temporarily relieved from your debts. It is because the second bank gives a credit-free period which is up to 90 days which allows you to repay your pending dues easily. After the end of the free-credit period, the normal interest rate will be levied on you.
- Know your billing cycle: Since the bank is allowing you a free-credit period you should try to make the most of it but for that, you should first ensure that you are completely aware of your credit card billing cycle.
- Convert payment to EMIs: If at any stage you find it challenging to repay the outstanding amount of your credit card, you can discuss this with your respective bank if possible they will convert this amount into EMIs that will be paid monthly. This facility charges a monthly interest rate of 2% to 3% along with there is also a processing fee which is around 1% to 2% of the outstanding amount.
- Talk to your card company: If you are facing any financial issue and are unable to pay your debts you should first and foremost talk to your respective bank and explain them your current situation. Banks often provide temporary succour or relax interests if the cause is genuine.
- Track your bills periodically: It is a good habit of managing and regularly checking your bills as it helps you keep a check on the bank for the addition of any erroneous transactions or miscellaneous charges. In some cases, there can be fraud transactions; therefore, regular checking helps a lot.
- Take advantage of the holiday period: This is the best way of managing your card. As banks give some interest-free period on the cards, you can enjoy this to the fullest. In cases of financial breakdowns, you can plan your purchases to avoid interests.
- Consider opting for Automatic Payment Facility: If you miss your bill payments deadlines, generally you should go for automatic payment facility. In this facility automatically bill amount will be deducted and you will be relieved of missing deadlines for payments.
- Limit the number of credit cards: The more the number of cards, the more tension you have of paying the amounts and this may also lead you in debt traps. So, you should always try to have a limited number of credit cards.
Credit cards are a smart way to fulfill your financial needs as it allows you to afford as much money you want.. But you need to control how to use these cards wisely. For this, you need to have good control over your expense, managing skills for monitoring and managing payments and a lot more. This will make you a smart use of a credit card.
Do you want to be one?
You will find the answer to this question in the following article. Go through this article to have a deep insight into smarter ways of managing credit cards and payments and escape from getting caught in debt traps. It is very essential to know how to manage the card before you get one as the consequences are worse and may lead you to all broke condition.