While April can strike fear in some folks who aren’t prepared to file their taxes by the mid-month deadline, April is also National Financial Literacy Month. This is a great time to do a financial health check. When’s the last time you’ve taken a realistic look at your credit cards, spending and saving habits and your overall assets? If it’s been a while, since you already likely have spring fever, why not take inventory of your financial situation, too?
First up, your credit cards. Do you pay the balance in full each month? If not, do you make more than just the minimum payments? If it seems as though the lion’s share of your salary is going to credit card payments, your first priority should be to get those balances down. If you’re carrying balances on several cards each month, you’re paying a significant chunk in finance fees.
And if you’re pushing your accounts right up the limit, those finance charges can easily put you over your credit line, resulting in even more fees. There are payment calculators easily found online and on all the major credit card sites, such as Visa and MasterCard. It might be painful initially, but you need to see how much money you truly owe, what you’re paying in finance charges and how quickly you’ll have those balances paid off by maintaining your current payment amounts.
Credit cards are a powerful financial tool; it’s just when they become a burden to your financial health that they seem like anything but. With every day revealing a bit more brighter news on the economy, there’s a good chance you can rework your budget so that you’re once again in control versus your debt taking control of your life.
Tips for Managing Your Credit Card Debt
A bit concerned you might not be disciplined enough to resist temptation? There are a few things you can do to swing the odds in your favor. Most of us carry our credit cards in our wallets. If you’re one of those folks who likes the sense of comfort from having the AMEX Gold Card within easy reach, why not thin your wallet? Leave the credit cards at home, with perhaps an exception of your gas card or a single credit card in case of emergencies (which, if you think about it, should be a credit card’s primary purpose).
Next up, it’s time to prioritize your credit card accounts. Your goal is to pay more than the minimum payments each month, but you should also be making efforts to focus on those cards that have the highest interest rates. Naturally, you want to really target those until one by one, those balances begin reflecting zeroes.
Once one account is paid off, not only will you enjoy that sense of pride of knowing you have one less financial obligation, but your credit scores will reflect those efforts as well. That’s always a good thing, especially in today’s modern society where credit reports are pulled for reasons such as employer background checks and your local bank that might be considering refinancing your home. The difference might mean a quarter percent on your home mortgage rate, but over the course of thirty years, that adds up to a nice savings.
Balance Transfer Card
While no one would ever encourage a credit card holder to incur more debt, it might be worth looking into some of the latest balance transfer cards. You might discover a far lower rate that will allow you to pay off your other high interest credit cards, which, of course, saves money in the long run. That said, remember it’s all about an honest evaluation – if you’re not disciplined enough to take the opportunity for what it is, you might want to steer clear of a new credit card offer.
If this is something worth considering for your unique circumstances, we suggest you consider the Chase Slate Vertical Credit Card. It’s a great balance transfer card and you’ll enjoy a 0% APR for up to fifteen months (does not apply for balance transfers). It offers no annual fee, zero fraud liability and email and/or text alerts so you’re always in the know.
Eliminating credit card debt does far more than improve your financial health, it can certainly lift a lot of stress from your physical well being, too. A few compromises along with a bit of self discipline can go a long way.
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