When having a credit card, there are important things to take into consideration, if you want to have control over your finances and avoid getting buried in debt.
Usually, the credit card won't make you richer, but it can surely make you waste your money on interest fees and taxes you did not foresee.
To avoid these situations and to secure your financial future, you should give some thought to certain aspects.
First of all, every cardholder knows that at the end of each billing cycle a credit card minimum payment has to be made, in order to avoid lateness fees and other penalties.
The credit card company can also raise your annual interest rate if you are late with your payments for more than two months.
This is what the banks expect you to do, just to keep on making the credit card minimum payment so that you will get to pay off your debt in a much greater amount of time.
The credit card minimum payment is either a percentage of your balance due or is the result of dividing the existing balance to a certain number of months.
Either way, the minimum payment is calculated in accordance with the remaining debt, therefore the bigger your monthly payments are, the sooner you'll be able to get rid of your debt and close that account, if you cannot manage it anymore.
Think about a pay plan, consisting of constant monthly payments, which are at least twice the minimum payment.
Try to stick to this plan and use all the extra money you can get in a month to pay off your debt.
Just think about how much money you'll be able to save in the long run, after you've paid the most part of the balance.
You can also consider opening up a new credit card account, even if this doesn't sound very wise, but it can actually prove to be very useful if you are already experiencing debt problems.
When you open up a new account you're likely to get an introductory rate of 0% APR on balance transfers or on purchases, and you can enjoy the offer for as much as 18 months.
What you can do to get rid of your old debt is to take advantage of the 0 interest rate and to transfer the balance from the old card onto this one.
Make a little more than your monthly payments, because without a balance at the end of the month you'll have much less interest to pay.
Think about closing down that account if the rates are too high.
Making the credit card minimum payment is not a good thing, it only seems this way for people always spending more than they can actually afford and who feel comfortable at the thought of returning the borrowed sum in a long time, little by little.
But if you actually care about your financial future, remember to always pay more than the credit card minimum payment.