7 Tips to Managing Credit Card Debt

Everyone should budget and save but if debt is becoming a problem, you can consolidate this debt onto your credit card. If you can save money each month, do so by debit order so that you learn to do without that portion of your salary. If you find that you need to pay for emergencies, having a credit card could prove to be valuable as a backup, but be sure to first Compare Credit Cards so that you find the best one for you. But do you know what is the best way forward regarding using your credit card?

Here are 7 smart tips to manage your credit card well:

  • Consolidate all your debt onto your credit cards and pay lower interest across the board (this is only feasible if your interest on your credit card is lower than that on your other loans).
  • A well-managed credit card is one of your most powerful financial tools as it is safer, easier and smarter to use than cash and can be used when travelling overseas.
  • If you are disciplined and have a debit order that settles your credit card bill at the end of each month a credit card can be cost effective and contribute to improving your credit rating.
  • A good credit rating can help you secure a loan for buying a car or a home.
  • If you have a problem controlling your spending though, getting a credit card is something you need to avoid as getting yourself is unnecessary.
  • You can still create a good credit record through your bank account by successfully paying monthly debit orders of your insurance premiums for example, if you are unable to control credit card spending and don’t want to have one.
  • Store cards can also tempt you to spend over and above your credit card spend so these should be used with great care or else simply just stick to one card.

Consolidating debt with credit cards:

  • If you have several accounts or loans that you are paying off at different interest rates, you can consolidate all your debts, such as small loans, clothing accounts or furniture accounts and pay all these off at a lower interest rate.
  • A good example is ABSA Bank offering an 8.8% interest rate for the first 8 months.
  • You will also be able to access your budget facility to structure some of your purchases over 18 to 48 months – smart move for those looking to get rid of debt.

Take out Credit Card protection that will pay out the full amount of monies outstanding should you die or become permanently disabled or even diagnosed with a dreaded disease. If you are retrenched and suddenly find yourself without work, usually 10% of your average outstanding balance will be paid for a period of time.