Are you a shopaholic who loves to indulge in impulsive shopping?
If answered yes and if you have the habit of whipping your plastics, you should be ready to face a mess in the long run.
With the present economic conditions within the nation, everyone should value their dollars lest they incur debt and need to rush to the credit card consolidation companies for combining your debts and repaying them.
When you’re in desperate times, you have to resort to desperate measures and unless you stop succumbing to your spending addiction, you can’t restart your present financial life.
If you’re someone who is using multiple credit cards, here are some tips that you should consider.
How to Manage Multiple Credit Cards
Having more than one credit card is a good way to build credit faster, so that you get better loan terms when looking for a mortgage or a student loan for your kids.
But irresponsible use of credit cards will get you very fast in deep financial problems. With an APR of approximately 20%, as most credit cards have (some getting closer to 30%), for every thousands of dollars you squander in a year, you’ll pay back 300 more.
Here is how you can safely manage multiple credit cards and reap the rewards, not the debt:
- Stick to using a single credit card at a time: Forget using all your credit cards at the same time as this way you can certainly rack up huge amount of debt. No matter how many cards you have, you should always stick to using a single card at a time in order to avoid incurring further debt.
- Pay off your balance in full: You should ensure paying off the entire balance every month so that you don’t incur debt after every billing cycle. Save money and ensure making timely payments on your credit cards so that you don’t have to repay a huge amount at the same time.
- Make more than the minimum payments: Even though the banks ask you to make just the minimum monthly payment on your credit cards, you should make sure you pay more than just the minimum payments so that you may get out of debt sooner. Instead of adding payments, if you make the scheduled minimum payments, you will accrue a lot of interest rates on the credit cards. Ideally, pay in full, but, if you cannot do it, pay as much as you can.
Read more: How to Pay off Credit Card Debt Fast
What to Do When You Get into Credit Card Debt?
If you didn’t know how to manage multiple credit cards safely and got into debt, here are 5 strategies to get back on track as soon as possible.
List all Your Debts
Just like with my medical SEO services, if clients want me to help them rank their websites, I first need to check them out and see exactly what’s being messed up there.
So, in my case, I run something that’s called an SEO audit.
In your case, you can call it a debt audit. Just take a piece of paper, write all your credit card balances, APR and minimum payments that are being accepted.
Now, with this information at hand, see how much you can actually pay each month to get rid of this nasty debt.
Pay off the Most Expensive Credit Cards
There are 2 ways to pay off credit cards, one strategy allows you to pay the credit card that has the smallest balance, as it gives you a quick win, while the other makes more sense, Mathematically, as you will pay off the highest APR credit card.
Example:
You have one credit card with a balance of 1,000 but zero APR this year and another one with 2,000 on it, but 27% APR.
As the zero APR credit card actually doesn’t cost you a thing this year, you could actually pay off the 27% APR credit card first and then, as soon as the new high APR kicks in, pay that as fast as possible as well.
Of course, situations might vary, but, a higher APR actually loses you more money than a credit card with smaller APR.
Stop Squandering Money
Stop buying useless crap and get an emergency fund up and running. This would allow you to manage more credit cards, if you will, but without the credit card debt.
Even after following the above mentioned points, if you still incur credit card debt, you need not fret as there are credit card consolidation ways in which you can put an end to your debt woes. This is a method by which you can combine your debts into a single monthly payment and repay the entire amount in single and affordable monthly payments. Instead of writing multiple checks, you just have to write a single check to the company and the payments will be disbursed off to your creditors in due time.
So, if you have multiple credit cards, don’t use them irresponsibly just to show off. Credit cards may seem convenient tools but they can soon become debt generators when misused. Get help from credit card consolidation options to repay debt and protect your score.
If you want to manage multiple credit cards you need to stick to using a single credit card at a time. This also help you to avoid incurring further debt.
I had 2-3 credit cards before, but it is not that possible to manage multiple credit card in general life of a common man, so I highly recommend everyone to if possible, carry single credit card which is acceptable everywhere.