A lot of consumers are having a hard time trying to manage credit card payments. Some even go as far as saying that they are in deep debt because of their credit card debt. This is a common sentiment among American consumers. A lot of them put the blame squarely on their credit cards when figuring out why they are in debt.
The NYPost even shares that credit card debt amount has already exceeded the 2008 level which is now over $1 trillion. It is alarming since 2008 was when the Great Recession started where the housing bubble collapsed. This was the time when a lot of people lost their jobs and homes which lead to an increase in credit card usage and debt.
It is a challenge to try and manage credit card payments when you are already running behind on most of them. For one, the fees and other charges added by the lender can make it difficult for people to get back up from debt. It increases the amount they have to pay month every month. Huge credit card debt can also hinder you from chasing your priorities in life.
Rather than putting money on hobbies which could help you earn extra money in the future, you could be forced to focus on your credit card payments. This can happen because you are trying to prevent fees and other penalties from creeping up into your budget. If you want to manage your card payments better, here are a few ways to go about it.
Manage credit card payments by making a list
To help you manage and even control your credit card activity, you need to have a clear idea of what your purchases are. List down all your credit cards and all the information regarding them. It can include lender name and contact numbers, what your limit is, fees and other charges on the cards, as well as the rewards it can give you.
Once you have these details, look at your purchase history and understand how you use the cards. Is there a specific card for a specific item in your budget? Are you following that rule or are you using that card for other expenses? Are you using your cards to your advantage or are you resorting to using it because you are low on budget?
As you create your list and see all the payments you have to make, you also get to understand patterns in your card use. If you notice that your card use spikes up whenever there is a sale promotion in the mall, try to get ahead of it by now bringing your cards around those times.
Incorporate credit card payment in your household budget
If you haven’t done so, make sure that your credit card payments are included in your monthly household budget. This will help you ensure that you will be able to meet all your payments every month. It keeps your budget realistic and ensures that you do not miss out and overlook any payments you have to make.
If it is included in your budget, you also see your total expenses for the month. This amount tells you if you need to start looking for ways to increase your income or if you have to cut down on some expenses around the house. The closer to reality the number is, the better you can plan for your monthly expenses.
It will be easier to manage credit card payments as well when you include it in something you monitor closely every month. You lower the chances of using the money elsewhere because you forgot to pay your credit cards. Once this happens, the statement coming next month could be a lot higher and make it more difficult for you to budget.
Make budget adjustments to pay off card debt faster
One way to manage credit card payments better is to make adjustments in your budget to help you pay off your debt a lot faster. It would be nice if you wake up one day and your credit card debt has been wiped out. That happened recently where Chase decided to forgive all outstanding balances for Canadian customers according to USA Today.
That is a great surprise for some people who just received a note saying their card debt has been wiped clean. However, you cannot expect that the same thing will happen to you. The best way forward is to treat your credit card debt with a sense of urgency. This is because there is a good chance that your credit cards have the highest interest rate in all of your payments.
This is the biggest reason why it makes sense to pay it off as soon as possible. In fact, one of the tips in credit card use is to only use an amount you can pay in full at the end of the month. If you are unable to pay in full, the least you can do is pay the minimum amount. You stay current but your lender can start adding fees and charges on your statement.
Use cash more often
If you want to manage credit card payments better, it is a good idea to try and use cash a little more. This can help you budget your money compared to when using credit cards. This is because when using cash, you are limited to the amount you have with you. If you are using your credit card, you can simply swipe and sign for almost anything you want.
This can ruin your budget and put you deeper in debt at the end of the month. You may not realize it while you are out and about shopping but once you get home, you are carrying a lot more shopping bags than you have planned. Getting that statement at the end of the month only confirms that you overspent and charged a lot on your cards.
Carrying cash will help you limit the amount you spend on one outing. With cash, your limit is non-negotiable. If you only have $50, then that is your limit. You cannot go over that amount that is why you are forced to budget with cash. This is one advantage you have with cash over carrying credit cards in your wallet.
Be mindful of online shopping
One of the biggest threats to your credit card use is online shopping. This is true especially when you have your credit card details saved on your computer or other gadgets. One thing you can do is delete any credit card information you have in your gadgets. This will not only help you protect your personal information but limit the ease of shopping for you.
It is a tough job to try and manage credit card payments but it is necessary so you can stay out of serious debt. A lot of people blame their credit cards with the debt level they have but that is not always the case. You have to remember that your credit card is just a tool that is within your disposal. If you use it wisely, it can help you manage your money better. On the other hand, using your card mindlessly and buying everything you want can land you in unmanageable debt.