8 Tips to manage your credit card debts

8 Tips to manage your credit card debts

Having a credit card has its benefits that range from ease of buying to never running out of cash when you are out in a marketplace. However, everyone who carries a credit card also has to deal with the issue of credit card debts that in some cases can mount to huge sums. Trust me when I say, sometimes, it can get really difficult to clear your credit card payments.

So, if you are using a credit card, you need to follow some guidelines and techniques. Otherwise, you will wind up in a spiral of debts. In the following paragraphs, we provide you eight most applicable and easy tips to manage your credit card debts.

Switching to 0% balance transfer Credit card

If you are still paying high-interest rates on your previous credit card payments and those amounts just keep on increasing, you should consider switching to a 0% balance transfer deal.

For example, the Bank of England, since March 2009, has stayed at 0.5%. While average credit card payments have increased up to 18%. In some deals, you can also get 28-months at 0% interest. Keep your eyes open for such deals.

Exercising your right to avoid increases in your credit card interests

In case you have huge amounts in your credit card payments, and your company tells you that they are going to push up the interest rate, you have as much as two months to reject that increase. However, you might not be able to further use your credit card. However, the original payments will be applied to previous interest rates, keeping your payments lower.

Avoid the payday loans

You should try to avoid the payday loans as they are incredibly expensive. Also, these payday loans can take the advantage of continuous payment authority in case the transaction is not verified initially. This can force the customers dipping in the red with their service provider. So, we advise that payday loans should be your very last resort and avoided as much as possible.

Try to join the local credit union

By joining the local credit union, you can benefit from a number of advantages that include:

  • Cheaper loans than other service providers.
  • These loans do not incur the general set-up fees.
  • Administration costs or the early redemption fees can be avoided.

According to the law, these credit unions cannot charge you more than 2% over a month i.e. an APR of 26.8%.

Try paying more than the minimum payment on credit card

On a credit, if you pay the minimum amount only, it can take you more than one year to payback the full amount. Also, this activity can negatively affect your credit score too.

You credit report is responsible for keeping the record of whether you pay the minimum amount or an amount bigger than that. If you are on a 0% deal and you continue to make the minimum payments, this might send a message to the lenders that you are struggling to maintain strong finances. This can affect your future lending rate from those lenders.

Always look to improve your credit score

It is advised to check your credit report with CallCredit, Experian and Equifax before you try to apply for credit. If you find any inconsistency or mistakes in your file, you should get the issues sorted out. Because that will imply a very poor credit history and if that is the case, either your application will be rejected, or you will be subjected to different (higher) interest rates.

Try to avoid the balance transfers

You should look to avoid balance transfers only for the sake of balance transfers. However, if you are trying to take advantage of better interest rates as mentioned above, your action is quite justified. Because, by making balance transfers, you will incur the high balance transfer fees, and your balance will automatically increase. Try keeping your balance transfers as low as possible to avoid potential credit card debts.

Completely and thoroughly understand your credit card terms and conditions

If you are looking to get credit for yourself for the first time or if you are applying for another credit card, go through their terms thoroughly. You should be completely aware of the charges, fees and the interest rates that apply on your credit card service. You should be aware of the time when you will be charged and how you will be charged. Understanding these terms will help in controlling your credit card debts and keep them in control for the future.