Are you one of those “close your eyes and hope it goes away” people when it comes to credit cards? Do you keep the wolf from the door by paying off as little as you can possibly get away with every month? Firstly, you are not alone. Secondly, it’s time to get credit card savvy. It’s not going anywhere so get ready to make clearing your card debt a priority.
Credit cards can be very useful. Booking a flight, cinema tickets, and hotels on line. It’s when you start using your card for items “because you’ll never have enough in your current account” that the problems start. While it’s so tempting to stick it on the card and worry about it later, discipline is definitely required. Ask yourself if you really need fifteen pairs of seemingly identical red shoes. Often if you give it a little time the impulse will pass. Walk away from the shop or get off the internet.
If it’s a little too late to be telling you that then here are a few pointers to getting, and keeping, you debt-free.
- Forget about minimum payment. If possible, pay it all off straight away.
- Once you have it cleared, start paying each month by direct debit.
- Choose a credit card to suit your spending type. If you’re a big spender, go for one with a low fixed interest rate. If you are sensibly frugal, then go for one with a higher interest rate - because you’re paying it off monthly the high interest won’t affect you and you can benefit from rewards like cash back and bonus points.
Make sure to shop around. You can transfer your balance to a new card. Just make sure it’s not a frying pan and fire situation. Your new card should:
- Have no fees on the transfer
- Have a period of grace where you don’t have to pay interest on the transferred balance (remember you do have to pay interest on any new charges!)
- Offer better rates than your current card. Be careful of cards that offer you the earth when you first sign up and then carry much higher interest rates after the honeymoon period. Always read the small print!
Remember – even if you do have your credit card under control, it pays to shop around. Your high credit score means you’ll have a wide range of transfer options. If your credit rating is less than exemplary you may need to put a bit more effort into finding the right one for you. To compare the costs of cards from all the major providers pay a visit to www.itsyourmoney.ie.
Tags: finance tips
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