There are several types of credit cards that provide various benefits and advantages. From airline miles to cashback, there is a wide range from which you can choose according to your preferences and lifestyle. However, are you afraid of not being able to manage credit card debt? In this article we give you tips for managing this and getting the most out of this product.
Credit cards can be very useful in everyday life, but you must use them cautiously to prevent a product that can be your ally from becoming the villain. Get to know our seven tips for managing credit card debt.
1. Reassess your monthly expenses
Review what expenses you are having and what may be unnecessary and make a monthly payment plan.
For example: Do you have gym membership but enjoy very little? You may be able to unsubscribe and save on this expense. Or do you have two streaming service subscriptions, but only use one? You can cancel one of these and stick with only what you use best and meets your needs. If you’re undecided, be sure to compare all streaming offers on the market.
Make sure you set aside enough to pay off your credit card debt at the end of the month.
2. Record every move you make with the card
Knowing exactly what your spending is the key to managing credit card debt. This way you always know what amount of the ceiling you have already used that month to make sure you don’t exceed it and avoid surprises when payday arrives.
3. Have only one card
If you are having difficulty managing credit card debt, acquiring another one in the hope of having more room to spend is not the best solution. Focus on settling your card debt before thinking about getting another one.
4. Know the Refund Modes
There are several credit card repayment arrangements. Most cards allow you to make fractional payments, so if you do not have money available in your account to pay it in full, you can do so in monthly installments ranging from six to 48 months, depending on the amount and the bank.
It is important to keep in mind that if you choose to repay the installment debt, it is accrued with interest in a percentage that varies according to the agreed repayment modality and which is called the APR (Global Effective Annual Rate).
You can get payment information about your card from your issuing financial institution and thus manage your credit card debt better.
5. Deal with the bank
If you have always been an exemplary customer and have a good relationship with the bank, you can negotiate the interest rate with the institution and reduce it to pay lower amounts on your installments.
6. Consolidate Credits to Manage Credit Card Debt
If you are having difficulty managing credit card debt and other benefits that you are not able to meet either, consider credit consolidation. By consolidating all the installments into one, you can save on interest and unburden your effort rate so you have more room to settle your credit card.
7. Note other associated costs
Apart from interest rates, there are other costs associated with using this product which is important to keep in mind to manage credit card debt.
Charges such as annuity, late payment interest, cash advance commissions or costs of payments made abroad should also be taken into account when drawing up your card payment plan.
Please refer to your bank’s Pricing and Expense Brochure, usually available on your bank’s website, for all charges associated with your card.
The purpose of using a credit card is to make your day to day easier and provide you with a wide range of benefits and discounts. However, with less caution you may incur large debts.
The principle should always be to prevent such a situation. However, in a more problematic case, be aware that there are debt support programs, such as the Extrajudicial Settlement Procedure (PERSI) or Questsave Bank’s Debt Customer Support Network (RACE) that helps to regulate the debt.