While they can be useful in helping to manage your money, credit cards can have hidden charges and terms that can be counterproductive to healthy finances. When taking out a credit card you will have to agree to terms and conditions that will apply to the use of the card. Each card will have a spending limit and a minimum monthly repayment, but be aware some of these cards also charge a fee.
Ways to keep on top of credit card debt
- Budget and be disciplined. Credit cards offer convenience for smaller purchases and allow you to spread the cost of larger purchases. But you should only ever spend what you can realistically afford to pay back.
- Keep an eye on your available balance. If you go over it, you could face fees and your card provider may ask you to pay back more than you can afford.
- Always make at least the minimum repayment each month, and more if you can afford it. Set up a Direct Debit or standing order so you don’t forget.
- Avoid making cash withdrawals on your credit card. These come with fees and higher rates of interest than purchases or balance transfers. Sometimes, you can lose special rates too.
- Pick the right card. Some cards are better for purchases, others are better for balance transfers. Look for the card that allows you use the card the way you need at the lowest cost. For example, a card with 0% interest on balance transfers but a high rate on purchases is no use if you’re using it to pay for food shopping.