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The holidays are over, but for many paying for the holidays aren’t over yet. According to researchers, more people utilized their credit cards for holiday shopping this year than in previous years. This means there are millions of people still paying for their Christmas shopping, trying to return their credit card balances. With so much debt these days, it is easy to fall behind and continue paying for your shopping well into the middle of the year. Those who know how to manage their credit cards have developed methods of paying off their balances and stay ahead of debt. Here are
5 tips for returning your credit card balance and keeping your head above water.
Pay at Least the Minimum Balance:
With your monthly bills stacking up, the credit card bill is one that commonly gets thrown in the back of the pile. This creates the risk of your funds running out before you reach that bill. If you are concerned with your credit and debt, as everyone should be, make sure you pay at least the minimum balance. This will keep your credit account from adding late fees, penalties, or cancelling your account all together. Once your credit account reaches collections, it is harder to pay with all the added fees. Paying the minimum doesn’t make any progress, but it will keep you from falling further behind.
Cut Back Monthly Expenses:
Sometimes your budget gets very tight, too tight to pay the extra balance on your credit cards. If you are trying to return your credit balance, cut out extra monthly expenses. Skip the movie night, dinner with friends, the low-fat extra foam latte every morning, and any other expense that will allow you the extra funds needed to put towards your credit card bill. If you have the premium cable package with all the movie channels, cut it down for a few months to get your bills back on track. You can always add the extras back on later.
Stop Using the Cards:
Another mistake many people make is paying on the premium and then using the card again. This defeats the purpose of paying. If you are making progress on paying off your credit card balance, stop using the card. Pay with cash as much as possible and continue paying on your balance without adding to it. Don’t take one step forward and two steps back.
Pay One Card with Another:
If you have more than one card with different interest rates, pay one card with the other. By paying off the card with the higher interest rate using a card with a lower interest rate, you can save money. This is a great way to consolidate your credit card balances as well. If you are paying on two different credit cards, pay them both off with the credit card with the lowest interest rate and turn those two bills into one low payment each month with low interest.
Borrow Against your Insurance:
If you want to pay off your balance quickly and have life insurance, borrowing against your life insurance might be the answer you are looking for. Getting a loan against your life insurance offers a lower interest rate than a commercial loan and the payments are manageable. In the event that you pass before the loan is paid back, the remaining balance and interest is deducted from the amount of the life insurance payout and the remaining balance is paid to your beneficiary.
Credit cards are a fantastic tool for getting what you need when you need it. In cases of emergency they can be a life saver. However, if you don’t manage your spending or keep up with your payments, credit cards can send you into a downward spiral of debt that is hard to return from. Budget for your credit card bills every month, reduce the frequency of use, and keep ahead of credit card debt.
Terri Miller is a writer and finance advisor who uses the up to date comparison of the leading credit cards in order to advise her clients on how to find a low interest credit card that is right for them.