When is the last time you pulled your most recent credit card statements in search of spending and payment patterns? You may be flirting with danger and not even know it when it comes to late fees, over the limit fees and other penalties. Worse, you may find yourself in a cycle of not quite making your payments before late charges are applied. If any of this sounds familiar, you’re not alone.
Looking Inward
The fact is, many Americans are playing the proverbial “robbing Peter to pay Paul” game. They’re having to decide which bills are more pressing for any given week: pay the light bill or the credit card bill?; try to get one more month out of those tires on the car or have them replaced now? They’re also carefully monitoring payment dates in hopes they can wait one more week before paying their credit card bills and living on a prayer that the payment is applied before a late charge is assessed.
We always read about how tough the economy is; how the high unemployment rates are making life incredibly difficult for so many, but we rarely delve in to define what “incredibly difficult” really means. When you’re buying groceries with your credit card week after week and then only making the minimum payment, that certainly qualifies for “incredibly difficult”. Many Americans are living by the adage of the ends justifying the means and right now, the sense of desperation that’s taken over the lives of many means they’re doing whatever it takes for mere survival.
Easy Cuts
Whether or not you’re living on the edge and are unsure of what tomorrow brings in terms of your finances, there are a few ways everyone can hone in on their spending habits. For instance, Americans drop a whopping $22 billion in credit card late payment fees. That starts a vicious cycle – you’re not only hit with a late payment fee, but you also risk a drop in your credit scores, which means the potential for higher interest rates. Higher interest rates when your money is already too tight makes the problem even worse.
Consider setting your credit cards up on automatic bill pay. This will eliminate the worries over whether the payment is credited on time. You can always pay more at different times of the month, but this way, you’re at least keeping those late payments at bay with fewer worries over increased APR, too.
Also, ATM fees are another culprit for eating away at your money. Check with your bank to ensure you know where all of its ATMs are. Those “few dollars” can quickly add up. Also, you might consider downloading your bank’s app, if one exists, so that you always know where the nearest ATM is. Your debit card – and bank accounts – will be better for it.
Contacting the credit card company might yield a few ways to keep so much of your money from going into its coffers. Explain your situation honestly. Many people fear if they do that, the credit card company will pull the plug on their sometimes-only source of spending alternatives. That’s not necessarily true, though. Remember that it’s your credit card fees you’re looking to reduce. Going into the conversation with that mindset will help you keep your focus and priorities front and center. Not only that, but ideally, you’ll come away with a lesser dependance on those credit cards.
Finally, check your credit card company’s website to ensure you’re up to date on the latest terms and conditions. So many of us receive our statements and toss everything, including the envelope it arrived in, into the trash can. What many don’t realize is that they’re also throwing out new terms and conditions or other important information. Any updates and changes are found in the revised terms and conditions. Not knowing those updates can cost you big.
With a bit of focus, determination and attention to the details, weathering these tough times isn’t so overwhelming. The lessons you learn from enduring it are ones that will serve you well and will help shape the way you teach your own children the importance of financial responsibility.
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