My credit card debt used to sometimes spiral out of control. There may be personal reasons to this, or maybe there are things I could have done to help combat the problem. I thought maybe I could have had the wrong credit card for me … as people can pick a credit card that looks good at the time, but was a limited time deal, and after three months you start paying a lot more in interest but never get round to changing or cancelling the card?
Does this sound familiar? After some research, you’d be surprised at how many people never quite find the time to do these things, and end up keeping the same credit card for years even though there are better deals out there. This is what the credit card companies play on, and end up making lots of money from your high interest rates. But let’s not get carried away, there are companies out there that do offer a great deal and it stays that way! Look at MBNA’s rate for life credit card deal. It is exactly what it says on the tin, a great rate for life! That’s the card I ended up getting, and transferred my balance for free. But what other ways could you spiral into debt and combat it?
Another reason for spiraling debt could be penalty fees and charges due to late payment. This not only increases your repayment amount, but can have a detrimental effect on your morale and make you less likely to repay on time, therefore incurring yet another late charge.
A good way around this is to set up a direct debit linking from the account your wage goes in. Making sure your credit limit does not exceed your wage, this should be perfect to keep on top of your finances, and build up a good credit rating in the process!
Choose Credit Cards Well
There are probably as many credit card deals on the market as there was hair on Rapunzel’s head, choosing the right one for you can be difficult. Reading the fine print is key, and really thinking about what you want the card for can have a big impact. Is the the rewards you like? Or the low APR? Maybe it’s the prestige and support associated with a football team rewards credit card?
Gather the Bills
To make a significant dent in your debts, firstly line up all your outstanding bills. Count the minimum amount of each. Add these amounts to make up a total minimum amount that you would have to pay. You will have to make payments above this minimum amount in order to get out of the debt spiral you are in. There are only two options: increase your income (work some overtime, do some freelance) or lower your expenses (take packed lunch to work, have a few less pints after work one day a week) It may be tough in the short run, but in the long term you would be free of credit card debt.
