Managing Credit Card Debt
A lot of people have credit card debt that they want to pay off. A couple days ago, Budget Babe talked about reducing your credit card debt.
When trying to pay off your credit card(s), it is best to avoid using them. However, sometimes you just cannot avoid using them. Here are a couple money-saving tricks to help deal with that situation.
1) If you need to purchase something with a credit card, pay it off right away and round up. If you can pay online, pay on your credit card (either before or right after your purchase) the amount you had to pay, rounding up as much as you can. For example, if you paid $46.95 for something, pay $50 on your credit card. That way, you are reimbursing the card for your purchase as well as reducing the debt by a little.
If your credit card company restricts the number of payments you can make in a month, write out a check for the amount and save it until it’s time to pay the bill. Then, pay the amount you normally pay plus the amounts of any additional checks you wrote.
By doing things this way, you will continue to see your credit card balance drop, instead of bouncing up and down when you make new purchases.
2) If you are saving up for a large purchase, consider “saving” by making payments on your credit card. Even if you end up having to charge a large amount later (once you have “saved” enough money), in the meantime what you will have saved in interest charges will likely far exceed what little interest the bank may have paid you if you saved the money in a checking or savings account.
And, as always, know thyself and be sure these methods will work out to your advantage before using them.
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