Credit cards can be a reliable way to manipulate cash flow, and they're more convenient to use than cash. However, credit cards are not free money. The debt acquired on the card has to be paid back, and you can do that by following a few straightforward principles.
Minimum Balances
Pay more than the minimum balance due each month. Paying only the minimum balance lengthens the amount of time needed to pay off the debt and puts most of your payments toward interest instead of principle. Consequently, you will pay more to the company than if you shortened the debt term length.
Consolidation
Consolidate your debts. Many people who use a credit card have multiple credit card accounts as well as other debts, such as car loans or mortgages. These different debts often involve different rates of interest, many of which can be high. When you consolidate these debts, you usually get a lower interest rate than the original rate on your credit card. A lower interest rate means less money is paid to interest over time and the credit card debt is reduced more quickly.
Cut Up the Card
Stop using the credit card. Even if you are using the credit card for necessary expenses, this will increase the amount of money you pay to the credit card company over time and take longer to eliminate the debt. See if you can cover your expenses another way instead of using the card out of convenience. If you must use the card, try using it only for small expenses, such as paying your electricity bill.
Do not continue to rack up debt on the card merely to obtain a perk the company offers you, such as airline miles. You'll end up paying for that perk through the interest you'll pay.
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