As you might have guessed from my recent 5 Ways To Improve Your Finances post, I’m focusing big time on that aspect of my life this year. And while I touched upon credit cards in that post, I wanted to go more into it as, well, it’s something until this year I wasn’t all that clued up on. So, if like me you’re looking to cancel a card for good, then you might want to have a nosey at the tips and tricks I’m going to be using;
Don’t Give Yourself The Temptation
Confession time, looking at one of my monthly statements from 2018 I had more than one where I had over £100 of spending I couldn’t account for in my diary. It wasn’t spent on a dinner out. Or flights. Or even a few new bits for my wardrobe. Turns out both having a contactless credit card in your purse is not always a good idea. That £100 and odd quid? I crunched the numbers and it wasn’t pretty reading. Turns out those £30 “I only went in for one thing and I get paid tomorrow shops” and “I’ll put this round on a credit card, that’s sensible” soon mount up. If you’re like me in that sense, don’t give yourself the temptation. Leave your card, particularly if it’s contactless, at home. It’s helped me cut back on unnecessary spend so far this year!
Ask Yourself If You’ll Really Pay The Purchase Off
It’s great to have the option to put any emergencies on a credit card. However, before you do, weigh up if you will actually pay said debt off on your next payday. For example, if it’s 3 days before payday and you’ve had your boiler break down. You’ve got a third of the money needed sitting in your account. You could either take out a payday loan and pay a daily interest on the loan of around 3.5% per day for the rest of the money. (Cash Lady lets you compare your options and see how much this would cost you.) Or, you could put the entire amount on a credit card. Know what kind of spender you are. So, if you’d pay off that credit card payment the next month or if it would be sat there for several. Remember, you’ve got options and as I said in a previous post, know your APRs.
Pay Double The Minimum
And, if you can, more than that. It’s worth remembering that that minimum payment just covers the interest you’re paying. It does not help towards paying it off. And, if you’re paying a large APR then it may be worth looking into Balance Transfering to one with 0%. (Or at least one with lower APR than your current card!).
Unlink Your Card From PayPal
Or Circle Pay, Venmo or however it is you send money. Having the option to send money from your credit card is way too tempting. Unlink your card from these places as they make it far to easy to treat credit as cash. And when you start doing that, it’s a slippery slope to be on!
If You’re Brave Enough, Cut It Up
Find yourself not managing to make a dent in a card and even leaving it home isn’t helping? Take the plunge and cut it up. Or at least lock it away. I’ve currently got my balance transfer card sat in my mum’s bedside table. I know if I’ve got to use that card I’ve got to be able to justify it to her. (And no one can dissect if spend is worth it like your parents can…). If you don’t have access to a card, you can’t use it. And if you pay towards something you’re not using. It’ll be paid off before you know it!