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Credit cards can be a wonderful and helpful tool but having one is like playing with fire. If you aren’t extremely careful about how and when you use it, you could end up spiraling deeper and deeper into debt, upsetting all of your plans for the future. So make sure you manage your credit cards responsibly so that you can take charge of your debt. This article will give you 5 proven strategies for ensuring that your credit cards never get out of control.
5 Easy Ways To Manage Your Credit Cards
#1 Get Out Of Debt First
If the amount of debt you currently have is more than you can pay off in a single month, lock your credit cards up and don’t touch them again until you have gotten out of debt. If that means you won’t be able to pay all of your bills, then it’s time to face some harsh facts.
The fact is that if you can’t afford to pay for your lifestyle with cash, you can’t afford that lifestyle. You have two options:
- Find a way to generate more income. Whether that’s picking up a second job or working on some side income projects, you need to bring more cash in so that you aren’t living on debt.
- Lower your cost of living. This means trimming away anything that you don’t absolutely need. You don’t need cable. You don’t need a new car. You don’t need name brand products.
Credit cards can only help you build a good credit score if they aren’t being used to add to the pile of mounting debt. Once that mountain has been eliminated, then you can bring those credit cards back out and start using them (responsibly).
#2 Don’t Carry Credit Cards With You
As mentioned above, you should be living a lifestyle that you can afford to pay for with cash. If you are truly doing that, then you do not need to carry credit cards around with you. Keep them at home. Only take them with you when you have an express purpose for them. Use them for that exact purpose. And then leave it at home again.
This is the same logic as not keeping cookies in the house when you’re on a diet. If you want to splurge on something but you don’t have the credit card with you, you will have no choice but to resist the urge. Not carrying your cards with you is the easiest way to manage your credit cards.
#3 Ask To Get Your Rates Lowered
This is not something you can do right away if you are still recovering from a bad credit score. However, after making steady payments above the minimum for at least 6 months (or a year if you had a seriously low score), you can try to get your rates lowered.
Just call your credit provider and ask them. It might sound strange but it can work. Getting your rates lowered will help you pay off your debt faster and lower the total amount you have to pay.
#4 Use Only What You Can Pay Off
The absolute best way to manage your credit cards is to use them on things you would have paid cash for anyway. Use them to buy your groceries or even pay your bills. Then, pay off the entire balance of the credit card at the end of the month using the cash you had set aside for those expenses anyway.
In this way, you are never taking on more debt than you can afford because you are only using it for the things you could afford to pay for with cash anyway. At the same time, using the credit card instead of just using cash in the first place will help you establish or improve your credit score because it shows that you are capable of responsibly using credit.
This is probably the most important strategy for using credit cards wisely. Buying things you can’t afford to pay for with cash is a sign that you are living a borrowed lifestyle. If it’s not in your budget right now, you need to do without it.
And as mentioned earlier, if you really want it, find a way to generate more income so that you can actually afford the lifestyle you want.
#5 Check Your Terms & Downsize
If you have more than one credit card, it may be time to downsize. There is some advantage to keeping credit cards you don’t use since your credit score is partially influenced by the amount of available (unused) credit you have. That is, if you have 3 credit cards with a collective credit limit of $10,000 but you are only using 1 credit card and paying off the balance at the end of each month, that is great for your credit score.
However, if those other two cards are charging monthly or annual fees just to keep them, it may not be worth it. And if there interest rates are through the roof, they’re not worth using. So check the terms on them. If they’re bad terms, cancel those cards. Your credit score may drop in the short term, but managing your credit cards and staying out of debt is your main priority.
And if you still want to enjoy the score boosting benefits of having unused credit cards to increase your total available credit, hunt for new credit cards with better terms. Get cards that don’t have regular fees and have great interest rates. But the first step is to get rid of any card that is doing you more harm than good.
Credit cards can be a great tool in helping you achieve the perfect credit score you have always dreamed of. But if you don’t manage your credit cards correctly, they can become the biggest reason that you are struggling with debt. Using the 5 strategies you just read about, you can make sure your use of credit cards is under control and helping you rather than harming you.
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