Credit cards are a great tool, allowing you to spread the cost of a large purchase, gain reward points for your spending and helping you to make ends meet at times when you may not have money in your bank.
But just like other forms of borrowing, credit cards have the capability to become scary and expensive problems when used incorrectly and so it’s important to use them wisely and mindfully to avoid high-interest rates and damage to your credit rating.
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Tips to avoid getting in trouble with credit cards
Frustratingly, people aren’t taught how to safely use a credit card in school and so it’s no wonder that so many people end up with large credit card debts and the pressure of crippling interest rates.
The good news is that it’s never too late to learn how to avoid getting into trouble with credit cards, so here’s what you need to know.
Stick to one card
In an ideal world, one of the easiest ways to avoid getting into trouble with credit cards is to only use one.
The fewer credit cards you have, the less chance of you racking up an unaffordable debt and the more chance of you staying on top of your repayments.
If you do end up having multiple credit cards, then keep a record of their interest rates and payment dates so that you can easily refer back to the information if you need it.
Don’t use them as your go-to for emergencies
Credit cards can be extremely helpful if you find yourself in an emergency situation and need access to some spare cash, but if you rely on them for all of your emergency payments then they can quickly stack up and you may find yourself struggling to make their repayments.
Instead of relying on credit cards, try to build an emergency savings fund for your emergency expenses.
Know your balance
Don’t ever get caught out by a maxed-out credit card by making sure that you always know your balance and your estimated monthly repayment for each period.
With banking Apps now readily available, there’s no excuse not to know the balance of your credit card and it will help you to keep track of your spending too.
Never miss payments and pay back more than you need
Lastly, whatever you do, try to avoid missing your credit card repayments.
Not only does it damage your credit score, but it could lead to your creditors calling debt-collectors to your home.
Make sure that you can afford the amount you owe each month on your credit card, and if for whatever reason you can’t make a payment, then always call your credit card company in advance to explain the situation and to see if you can come to an agreement.
In an ideal situation, you should be aiming to pay off your credit card balance more quickly than simply making minimum repayments as this will help you to reduce the total amount of interest that you pay.
Getting help with credit card debt
If you find yourself in a situation where you have more credit card debt than you can handle, or where your creditors are calling you to ask for missed payments, then it’s time to reach out to an expert for help.
Here at Bankruptcy Canada, we specialize in helping people from all walks of life to get out of debt by connecting them with a Licenced Local Trustee who can offer them debt relief services and advice.
To find out more about what we do or to be matched with one of our Trustees, contact us today on (877) 879-4770 or fill out our online form.