Credit Cards – Pay More Than The Minimum Amount

Paying back your credit card debt can sometimes get on top of you and you only end up being able to pay back the minimum payment each month, so hopefully here are a few things to work on to try and get a foot hold in your finances.

First thing to do is to try and pay back more to the account, than the credit card company is charging you in interest payments. For example if you are paying £120 into your debt each month, check to see that this will more than cover the interest that is being added monthly and break it down to see how much is actually going towards the debt.

The trick with the credit card companies was that they used to ask for a minimum payment of 5% of the total amount that was owed by you, this was not making them enough money so they decided to decrease this to 2%, thus meaning that people thought they had more cash to spend as they had to pay less back to the credit card company, which in turn only added more interest to their accounts, meaning more profits to the credit card lenders.

The next step is to try and reduce the debt; this will mean that you will be paying less interest and saving you money in the future. To do this you could always shift your debt to a credit card that has a balance transfer facility, as there are many credit cards that are offering 0% periods of up to 12 months, this will give you some leeway and mean that any cash that you are paying to the debt is reducing the debt and not just paying the interest.

But I you go down this route make sure that the credit card that you transfer your balance to, returns to a lower standard rate of interest than the one that you originally had and the lower the better for you, as always remember the credit card should suit you not the credit card issuer.

Also you have to remember to keep up with the minimum payments at least on the card that you transferred to, if not you could only land yourself in more hot water, with penalty fees and in some cases the credit card issuers could add on the interest from the moment that you opened the card up.

Once you feel as if you are getting back on an even keel, you should learn from where you have just come from and be determined not to go there again, so make sure because you are back on your feet you can go on a spending spree again, just try and make sure that you are debt free and use the credit card with the freedom in which it gives you, but on your terms and knowing you can clear it at the end of each month.