Your credit card can be boon or a bane depending on your immediate situation. You can use your credit card judiciously and as a result improve your credit rating. However, if you have been spending too much on the credit cards and have not been paying up your bills, you are bound to have a negative effect on your ratings. So, an important aspect of using credit cards is to understand how to regulate your spending. If you have been at sea with that, we will give you a few tips on how you can rein in your spending on those cards.
Listing your purchases: If there is a problem of overspending or uncontrolled spending, the first ideal thing to do would be to bring up all past credit card receipts. Put together a list of all purchases (at least big ones) that have been put on the credit card in the last few months. Monthly purchases such as groceries and essentials should always be put on a debit card. This will easily separate essential expenses from those that can be avoided. Once you go through this, you will find that you are left with purchases that may be non- essentials or luxury items. If you do not have the money in the bank, then there is no justification for purchasing such items on a credit card.
Fee Structure of the Cards: One of the most important considerations, when you pick a card, is the fees that these credit card companies charge. Let’s face it these companies earn their money through these fees. There will be a ton of these companies hounding you to opt for their credit card because they do not have an annual charge but reading the fine print will tell you that these charges will come back on at the end of the year or at some date that they mention. These cards do give you reward points and other such interesting things but the annual fees that you pay will begin to pinch. There is a way though, there are quite a few credit card companies that do offer these cards without annual fees but there will no frills. Though it may not sound interesting, at this point when you are trying to rein in spending, it will do the trick to save you some money.
Those credit card offers are not always bad: There are several calls that you will receive at any point of time from card companies that are trying to sell you their credit cards. Now while these may seem like junk calls since you already have a card, it might make perfect sense to ask for details. Make a note of the interest rates and compare them with what you are paying. You can always switch if you are able to make a transfer of the balance. On the other hand, you may try calling your current credit card company and negotiate a better rate of interest. In more cases, than we can imagine, you will be lucky and may end up with a lesser rate of interest.
Finally, speaking with your banker: This is probably never explored as an option but this is probably one of the best things you should do. Take an appointment and meet with a relationship manager of your bank. Nine times out of ten, they will work out a solution depending on the problem you are facing. You must let them know that you are having trouble repaying a certain amount back and they will sit down with you to figure out a plausible solution that works for both the bank and you. For instance, the bank may decide to allow you to repay a portion of it immediately and on that condition, may write off the overdue payment fees or any other fees that may be due.
Maintaining a credit card is not tough. Especially, if you make sure you only purchase those things on a card for which you have cash in the bank. Also, all your bills need to be paid off in full settlement. Any part payments and it will not be long before you lose control over the amount spent and the amount repaid. Since your spending and repayments influence your credit score, paying attention to these small things will have a positive effect on it.