Your Debt Threat

Posts Tagged ‘Manage’

Credit cards are a great idea – they are convenient to carry around with you. Accepted in most stores and provide a fantastic way to pay for goods if you are waiting for payday. However, they can easily become a burden when the bills roll in and you do not have the means to pay them off in full. Many people have found out how easy it is to run up debts on their credit cards to their cost and now face thousands of pounds worth of debt. Unfortunately, this is the way society, and indeed the world, works at the moment and there is nothing we can do about it.

However, it is possible not to get into debt to begin with, which is the best option at the moment or so it appears. So the cost of living has risen and the lifestyles that we all lead far outweigh the amount the majority of us earn in a year, but only a few minor adjustments need to be made to ensure that we do not get into debt in the first place. The following are excellent ways to manage your credit card before it manages you.

1. Do not memorize your PIN number – If you know your pin number then it would be extremely tempting to spend on your credit card every time you go into a shop or are short of cash. The only way to stop this behaviour is to stop using your PIN number. The only way to stop doing that is not to memorize it in the first place. There is nothing wrong with spending money on it on the Internet when you can weigh up the options, but impulse buys are often what get us into debt in the first place. This also goes for the cash cheques that credit card companies send out to their customers. Just burn them as soon as you get them to stop yourself from using them.

2. Keep a track of your spending with a diary or spread chart – This allows you to track what you have spent in a month, what you are buying and thus allows you to see whether or not you can afford to pay off the bill and cut out any unnecessary expenses. It is easier to realise just how much debt you are getting into if you can track your payments.

3. Make use of online balance facilities – Many companies now have online tracking facilities or automated numbers that you can call for an up to date balance. Make the most of them because you will be better able to track how much you have spent in a different way to the above point. You can even use them in conjunction with each other. If you use Internet banking or the credit card facilities then you will also be better able to pay off as much as you like whenever you like.

4. Research any offers on your current cards – Some cards may have 0% purchase or balance transfer deals. Make the most of them if you are in debt or do need to spend on your cards. Others have anniversary deals as well so you can use them to manage your bills as and when the offers become available.

5. Reduce the number of cards that you have to one or two for emergencies only – If you only have one or two cards for emergencies only then you will be equipped for disaster but ready to avoid debt as well. The more cards you have the more opportunity you have to get in debt so cutting the amount down will give you a better sense of where you are financially.

Undoubtedly there are distinct advantages to having a credit card, provided of course you know how to use one to your benefit. However, since an estimated six out of every 10 people in the United States alone are seriously in debt largely in part to misusing credit cards, it’s apparent that many people are completely unaware of how to manage their finances, and how bad credit can adversely affect most every aspect of life.

Needless to say, prevention is the best means of defense when it comes to avoiding the pitfalls of credit card debt. But today, the rules of the credit card industry have changed considerably over the last few decades, so much so that most people have no trouble being accepted for a line of credit. While to a point, this definitely can be a positive thing, although as most of us can attest to, it’s rather easy to fall into the trap of overspending by using credit cards unwisely.

Setting a Budget

Setting a realistic budget, and then following through with it is always the first step toward successfully managing debt. Although it may seem simplistic, actually writing down each and every expense gives you a visual example as to what your financial picture really looks like. So many of us don’t realize how much the little things add up, buying lunch instead of bringing it from home, stopping for coffee before work, eating take-out food because it’s quicker, but if you make a note of each time you spend money, regardless of the amount, you’ll soon see how much you’re wasting, and realize how your money could be better spent.

Simply put, if after doing your budget and keeping track of your finances you still find yourself using your credit card to pay for the every day necessities of life, this should be a clear indication that you’re living beyond your means.

Find the Right Card

Shopping for the right card is more than worth the time it takes to do so. With all of the different cards, offers, and incentives available, it’s often difficult to know which is best. Finding the right card for you will depend on your circumstances and what you plan on using the card for.

Ideally, the card with the lowest interest rate coupled with the lowest fees would be the wisest option, but those aren’t the only details you should be aware of. Make it a point to read all of the fine print so there will be no unpleasant surprises when the bill arrives.

Be Diligent

Being diligent about paying your credit cards on time and keeping your spending under control are imperative, not only for your long term credit history in the future, but also for your financial picture today. If possible, pay more than the minimum amount due, and be religious about paying on time each and every month. Always account for processing time by the credit card company, as well as the time it will take to travel through the mail.

Online bill paying is an excellent option for avoiding late or over-the-limit fees, and some companies also offer automatic bill payments, where the minimum payment due will be deducted from your bank account at the same time each month. This is a rather convenient option, but it’s important to ensure you’ll have the funds to cover the payment on the due date to avoid hefty fees from both the credit card company and your bank.



Copyright (c) 2010 Pamela Williams

Financing is one of the major concerns of small business owners or people who are just starting their own businesses. In the previous years, people are required to have a huge working capital before they can start their own business or small enterprise.

Today, small businesses can take advantage of the fact that they can use small business credit to help them not only to start up a business but in managing it as well.

Is it really possible to use a small business credit card when you are just starting up your business? The answer is yes. Credit cards for small business can be of great assistance to prepare all the equipment you need to begin your business operations. Some of the equipment or device essential for a business is a computer, printer, a fax machine, telephone, or a cash register. With a small business credit card, you don’t have to buy all these things using cash. You can charge these expenses to your card and pay them off in an installment basis the next month after you have already opened up your business.

Credit cards for small businesses can also be used as your working capital. You can either buy raw materials using your business credit card and start manufacturing your products right away or you can also just buy merchandise at a wholesale price and start selling them. Afterwards, you can pay off these expenditures in a monthly basis using your card.

Another great advantage of this card is when you get short on your cash flow in the middle of your business operations. Having your card can make things a lot easier especially if you urgently need to purchase items or pay services such as shipping or printing purposes.

Small business credit cards have lots of benefits that make it more rewarding. Since we are talking about rewards, most credit cards for small businesses come with a lot of great incentives which can be in the form of cash rebates, cash back programs or fee travel tickets. Since businesses usually purchase in bulk or in large packages, the opportunity to earn points equivalent to bonuses is much bigger than for those who use regular credit cards.

If you’re thinking about starting up your business with small business credit card, you are very much welcome to do so. Just remember the advice that applies for all those who own credit cards. Pay off your monthly charges on time and never put off one single payment.

It would be best to have a plan prepared on how you will pay for your purchases even before you purchase them using your small business credit card. This way, you can consider how much you can afford to pay and avoid exceeding your budget. Technically, this is really the only key in managing credit cards successfully whether it’s a business credit card or a personal credit card. Lastly, it is always recommended for businesses to open a regular business account in a bank as soon as the business becomes stable.