Ways You Can Minimize Credit Card Debt

By Product Expert | Posted in Credit, Finance, Tips and Tricks on Monday, June 29th, 2020 at 1:30 pm
Person holding a stethoscope on a stack of credit cards

Tips for Limiting the Amount You Pay on your Credit Card

Credit cards are very handy pieces of plastic. With just a quick swipe, reading of the chip, or inputting of the numbers, you can walk away with groceries, merchandise, and more in a matter of minutes. Since credit card companies give customers a month to pay off the balance, this can lead to a snowball-effect in regard to debt. If you want to limit the amount you pay on your credit card and save some money, check out these few days you can minimize credit card debt.

[ READ MORE: Tips for Making a Personal Budget ]

Fully Pay Your Statement Balance Every Month

The best way to limit credit card debt is to not let it build in the first place. When you receive your credit card balance, you will want to pay off that amount in full. By paying only the minimum required amount, interest will be applied, thus making your debt even worse. If your debt gets out of hand, it will be very costly and time-consuming to get rid of it. Not only that, but you may notice some drops in your credit score if you hold too much debt.

Set a Budget and Treat Your Credit Card Like Cash

Happy family with a girl putting coins in a piggy bank

Since payment on your credit card debt isn’t required at the time of a purchase, it can be easy to overspend. Rather, set a budget and treat your credit card like cash. Calculate how much you can afford to spend that month and do not exceed that number. Save receipts and deduct that amount from your allocated budget to keep yourself on track. The 50/30/20 budget rule is a popular and useful guideline to follow.

Limit Your Credit Card Usage to Essentials

One popular method you can try is to limit your credit card usage to fixed purchases, such as rent, utilities, and insurance. By doing this, you know roughly how much your credit card bill will be every month. Also, you will have the majority of your essentials covered. For the remaining purchases, only use a debit card or cash.

Of course, for this tip to be useful, you should also unlink your credit card from your internet browser and/or any online retailers. Having to manually input the numbers can help deter you from making any excessive and unnecessary purchases.

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