debtconsolidation-programs

Some thoughts about credit cards

If, like me, you have credit cards, you've probably run into difficulties with them before now. The problem I've always found with credit cards is that they're too easy - it's so convenient putting things on them that it's hard to resist using them more than you should.

The problem there is that the total sneaks up over time. One minute you've got a £2,000 balance but then the next time you look it's up to £3,000. Petrol, clothes, computer stuff - it doesn't feel like you're really spending so it's a bit of a shock when you realize how much you've been doing this.

So I sat down and started trying to figure out a way to hone my credit card debt management skills.

I've tried not using my cards but it isn't easy. It's not always convenient getting to a free cash machine, and I hate being charged to get my own money out. So it's always tempting to just stick it on the card and promise yourself you'll pay off that debt before it starts picking up interest.

There's no way I want to get rid of my cards altogether, either. Even if I could pay them off tomorrow, I'd still want to hang on to at least one.

A friend of mine had a good idea. Why not cut up the actual cards - but keep the accounts active? That way I wouldn't be able to use them but I would be able to get a replacement card if it looked like I was going to need one. It's along the lines of freezing a card in ice and thawing it out if you need it (another idea that doesn't get rid of your cards but does stop you using it - and if you do decide to use it, the time the ice takes to thaw should give you time to overcome the temptation to use it!).

Anyway, cutting them up seems like it might be a good idea, but I've added a second part to the plan: overpayments. You're always hearing about the need to avoid making just minimum payments, but have you done the maths? Find a good online 'credit card calculator' and try a few figures. You'll be amazed by the difference it makes.

Right now, my minimum payments add up to around £60, but I reckon I can afford at least twice that. Which means my debt goes down faster. Which means it'll be gone sooner. Which means I'll pay less interest in the long run - well worth paying extra now, since I'm not worried about being able to afford it.