Reducing Credit Card Debt
Credit card debt may sometimes get a bad rap because of the way the interest is structured, but knowing and understanding exactly how your credit funds work can empower you to make smart money decisions.
While credit cards and a line of credit account is a great way to ensure you’ve always got access to funds, handling multiple credits can become very stressful when you aren’t managing your money in the most optimal way. We’ve collected some helpful tips for managing your credit card and reducing your balance to ensure you’re making the most out of your purchases.
1. Pay more than your minimum repayment amount
Credit cards are usually offered with a payment schedule that requests a minimum monthly repayment amount. Choosing to pay only the minimum monthly payment amount may not help you to reduce your credit card as quickly as you’d like. It also means that you won’t be able to reuse the funds available on your credit card until they have been repaid. You’re also likely to incur much larger interest fees when you’re only paying the minimum monthly repayment amount.
Setting up automatic direct debits will help you keep on top of your regular repayments. When the repayment amount is automatically debited from your account then you don’t have to think about it. That is, until the debt is cleared and it’s time to celebrate.
2. Prioritise the highest interest debt
When you do decide to settle your credit card debts, it might be a good idea to choose the highest interest credit cards and focus on getting them down to more manageable balances.
You can do this in a couple of ways; either prioritise it completely by devoting all available extra cash to repaying it or give it slightly more attention than your other debt. You can use tools like a personal loan calculator to help you work out the total interest payable on your credit balance and how long it will take to repay it.
3. Consider ways of consolidating your debt
Consolidating your debt means borrowing a quick loan for the full amount you owe and paying off your smaller debts with it. What you’re left with is an easy loan with a scheduled monthly repayment at a fixed rate of interest that doesn’t compound like credit card debt can.
4. Make a list of your current debts
This way, you’ll be able to work out what the total amount payable really is. Choosing cash loans like fixed rate loans mean that you know exactly how much is payable over the total loan term. It can help to dig you out of compounding interest quickly and effectively, usually with a monthly loan repayment amount that is actually lower than the total of all of the smaller repayments that you’re currently making. Whether it’s a mini loan to help you reduce a credit card or a larger short term loan, we can help.
So when choosing a credit product, you have to make sure you’re doing careful research and going for the one that fits your circumstances and offers the utmost transparency.
The credit card for Gen Now
MONEYME offers Freestyle, a virtual credit card that you can keep in your smartphone for in-store Tap n Pay, online shopping, or paying bills.
They are completely upfront and transparent with their fees and charges, helping you dodge unexpected costs so you can make payments confident and comfortably.
The interest rates for Freestyle are highly competitive, and approved applicants are offered 55 days interest-free on purchases made. This means that interest is not charged on your credit card balance for 55 days from the date of purchase.
Apply online today for either the Freestyle virtual credit card available for balances of up to $20,000 or easy money loans available for up to $50,000 today.