Stop the headaches and take charge of your cards with these simple tips
Credit cards are great financial tools, giving you purchasing freedom and the opportunity to build a strong credit profile — a must-have for anyone looking for the best deal on a car, home or even a business loan. For many, however, credit cards are also a great way to get into trouble. If your credit card bills are controlling you rather than the other way around, read on to learn how you can turn the credit card game back in your favor.
First, you have to make sure you know exactly what the terms of your credit card contracts are. Interest rates, grace periods for repayment, late charges and other fees vary considerably from card to card (and from consumer to consumer). Read the card agreement before you spend or sign, and be sure to read your monthly statements carefully.
“If you don’t open your credit card billing statement, you risk missing your payment due date. You could also miss important announcements about changes to your credit card terms,” writes personal finance expert LaToya Irby. “Knowing your credit card terms give you more control over your credit card costs. You know how you should and should not use your credit card based on how your creditor will respond to your actions.”
Once you have a handle on your credit card terms and know what not to do to make the bills even worse, it’s time to start paying those bills off. Making minimum payments or simply paying what you can after a month’s worth of spending is setting yourself up for years of effort and a slim chance of successfully climbing out of credit card debt. Instead, budget a set amount — more than the minimum required payment — that you will pay toward your credit cards each month, and make it the first thing that comes out of your paycheck.
“Most card issuers let you set up automatic payments from a checking account and allow you to decide how much you pay,” says credit adviser Elizabeth Ody. “This strategy keeps that money from becoming a temptation for you to spend on something else because it’s already gone. It also helps you avoid late payments that can damage your credit score, cost you a bundle in fees and trigger an interest rate hike.”
Finally, if your bills are simply too high for you to manage even with a strict budget, don’t simply ignore the problem. Talk to your credit card company and see if they’ll negotiate — you might be surprised.
“Sometimes you can get your interest rate lowered, set up a payment plan that will allow you to pay off your debt, or even get some of your debt forgiven, all with a simple phone call,” writes financial journalist Amy Fontinelle. “If your first call doesn’t work, remember that just because one person says no doesn’t mean that’s the final answer. Keep calling the company back – you’ll often get a different customer service rep almost every time, and talking to different people may allow you to negotiate a better deal.”
Getting your credit cards under control might take a bit of effort, but it will be well worth it in the long run. Once you’re free from the nightmare of mounting credit card bills, you can focus on building a lifetime of financial freedom.
Used with Permission. Published by IMN Bank Adviser Includes copyrighted material of IMakeNews, Inc. and its suppliers.