Credit cardholders are advised to plan their repayment strategy ahead of time. You may decide to charge some expenses to your credit card or credit cards, but have you thought about repayment when the holidays are over? Are you ready to greet the New Year with a smile on your face, confident that you are not stuck in bad debt?
Holiday debt is a very real dilemma for many consumers and if you do not have a battle plan, the problem will come sooner than you think and you won’t ready to face it. Consider the following tips on how you can manage holiday debt and avoid the hassle:
Do not acquire more debts than you can handle. As the popular saying goes, “An ounce on prevention is better than a pound of cure.” This proves to be true when it comes to debt and credit. Do not acquire more debts than you can afford to pay.
Sometimes, shopping with credit cards with rewards can create the illusion that you are not spending real money. When your credit card bill arrives, that’s the time you realize that you are stuck in bad debt and repayment won’t be easy.
Keep in mind that even if you’re swiping a plastic, you will still be using real money to pay for those charges. So if you don’t want to be stressed with debt-related problems, keep your credit usage minimal.
Examine your credit card bill. Check your statement of account as soon as it arrives. If you have not received your bill yet, call up your issuer immediately. Most of the best rewards credit card issuers also allow their cardholders to check their accounts online and this is something you should take advantage of.
It might be tempting to pretend that you do not have repayment obligations just because your bill has not arrived yet. However, delaying repayment will only complicate the situation. Late fees can prove to be expensive and missing your due date will also hurt your credit score.
So, never ignore your bills. Check your account and make sure that there are no incorrect or unauthorized charges. If you notice unfamiliar charges in your account, you have the right to dispute them so call your bank right away.
Consider transferring balances. See which of your best credit cards carry the lowest balance transfer rate, and consider combining your charges in one account. This can be a smart strategy especially if one of your credit cards carries a high APR.
However, before making a transfer, check the balance transfer fees. How much will you need to pay each time you move over a balance from another card. Also, make sure that you will not max out your limit by consolidating your balances. Last but not least, you should do your best to pay off your full balance at the soonest possible time.
It might be tempting to open a zero rate balance transfer credit card for the purpose of consolidation. While this can be a good move, it should be done with extreme caution. You want to make sure that regular APR will still be reasonable when the introductory period expires.