How to get out of debt if you have credit cards
As we said at the beginning, credit cards are an incredible financing tool if we know how to use them.
Then once you return the unnecessary cards that you have more, it is time to give intelligent use to the one you have. Here are some practical tips:
- Make all your purchases at a single fee, or failing that, pay your shopping within the first month. What this does is that you don’t pay interest, since they start running after the second one is.
In simple words, when you buy a single installment, you are borrowing money for free.
- The credit card quota is not an “extra money” with which you count once you run out of income. So do not buy things you do not have to pay for next month.
If you do, it means that you have not learned how to get out of debt and want to continue maintaining an expensive style with too expensive plastic money.
- To the extent possible, use the credit card to make costly purchases. When you get used to paying everything with your card, and you continue with the cash in your wallet, you get the impression that you have not spent almost so you feel you can relax.
The problem comes when the bill arrives at the end of the month, and you don’t have to pay.
- If you are using credit cards and you are not taking advantage of the benefits they offer; you are giving away your money in each driving fee.
From the points or miles, they offer and what you can redeem for trips, products, or experiences, even medical insurance, vehicle insurance, shopping, locksmiths, protection of your purchases, among many other benefits, your cards are more than just plastic.
- Last but not least, you know two important dates: The payment date and the cut-off date.
The first is the date until when you have the deadline to pay what you owe on your card. The cut-off date is until the day of the month that your credit card will be charged.
As well? If your cut-off date is the 15th day of each month, the purchases you make after this day will not arrive on the next invoice, but on the next one that follows.
For example: If your cut-off date is 15, and you decide to buy a TV on October 14, you must pay it in November.
Now, if you decide to buy it after your cut-off date, that is, from 16 onwards, you will not pay in November if not in December.
- Avoid late interest by paying on time:
You are already paying considerable attention for your debts, did you know that if you fall behind on the payment dates of your debts, the benefits are much more expensive?
This is known as the default interest rate and consists of a penalty for delaying paying your debts, regardless of whether they are credit card debts, mortgage debts, or free investment loans.
How is it possible to learn how to get out of debt if you’re not paying them on time?
You can place a reminder on your cell phone or calendar, or apply item number 6 on this list to learn how to get out of debt.
If you think that this kind of thing does not help you get out of debt quickly, just remember that if you forget to pay on time several times in the same year, what you will pay extra is equivalent to two or three more installments.
- Check wallet purchases:
Wallet purchases are an exciting alternative when it comes to learning how to get out of debt quickly.
Why? You may have several debts with different entities, banks, or intermediaries.
Then it consists of going to a bank or financial institution and asking if they are interested in grouping all your debt and that they buy your portfolio.
That is, they pay all your debts, and you agree to pay them for a specific interest rate.
This makes your life easier because you will not only be paying a single fee for all your debts but because you can negotiate the interest rate they are offering you and pay less than what you are currently doing.
The worst diligence is the one you don’t do. The first thing you should do before looking for purchase of your portfolio is to go to the bank and renegotiate your debt if they say no, you can proceed to other entities.
- Automate the payment of your debts:
how to get out of debt by automating payments
Many times we do not pay on time, we incur interest in arrears, or even report to risk centers not because we do not have what to pay, but because we forget to do so.
What better way to get out of debt fast and easy than automating the payment of the same?
The monthly payment of your credit card can be automated, the fee of the apartment and the car can be programmed in such a way that you receive a monthly notification every time the money is debited from your account.
However, you should continuously review your payments, the current balance of your debt, and the amount of money you are dedicating monthly to your mortgage.
Usually, the payment schedule has an end date, so you should continuously check so that you will not fail to meet your commitments.
- Stop being debt guarantor of your friends:
Do you know what happens when someone fails to pay their debt? The bank goes to its guarantors to be responsible for the payment.
Nobody doubts that you are a good friend and that you are the type of friendships that one should surround oneself, but please, look for another way to show your association that is not being someone else’s debt guarantor.
There have been many cases in which those you call friends to stop paying their debts, and they are not careful about the fact that it is you who has to go out and pay something you have never used or enjoyed.
- There are also good debts:
It is essential that you do not forget that there are good debts, those that we mentioned at the beginning of this article, and that can help you generate income.
They are debts that allow you to start, for example, a competitive franchise business, or invest in one of your projects to earn money online.
What is the difference between good debt and bad debt? That the first one generates enough income to cover its cost, that is, the interest rate, and leaves you a surplus.
While the second is used to buy items that do not generate extra income, and even represent a new expense since you must keep them.
For more information about debt settlement or payday loan debt settlement you can visit on online expert.