It is more important than ever to maintain good credit. One area that is particularly difficult for some people to manage is credit card debt. Below are a few tips on managing your credit cards and gaining financial freedom:
Signing up for more than two reward cards will defeat the purpose of the reward card! More than 2 and you are not spending enough on any 1 card to earn enough rewards. A lot of cards require that you spend a ton of money before the rewards are “rewarded”!
Remember to not get yourself into larger debt trying to earn a reward. Yes, you may have earned a free round-trip ticket to anywhere but what are you going to do with all those “as seen on tv” purchases you had to make to get it!
If you cannot pay your balance in full each month, at least pay more than the minimum payment on your bill! Since the minimum payment on your credit card bill is calculated as a percentage of your current balance, the minimum payment decreases as pay your balance, BUT .... thanks to the wonderful world of compounding, you are paying mostly interest instead of the balance. By paying at least $7 more than your minimum payment, you will start decreasing the balance quicker.
New promotions and deals are being presented by card companies all the time. Ask your credit card provider about any new promotion or deal that might work for you. All they can say is no!
Pay multiple credit cards using the “snow-ball effect”. Determine the maximum amount you can pay on your cards each month. Pay as much as you can on the highest rate card and the minimum on the others. Once the highest rate card is paid, apply that monthly payment to the next card, continuing until you have paid off all your credit card debt.
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