Unless you have a steady income, I strongly suggest you get rid of your credit card/s as soon as possible as those tiny plastic devices might be the reason why you don’t seem to be able to save as much as you want to. Don’t mistake me, credit cards can be useful and if you love shopping and eating at fancy restaurants, a credit card is just one of those “accessories” that you can’t do without.
However, the main problem with credit cards is that their holders tend not to keep track of their expenses, which is why, every now and then, you find white envelopes containing credit cards that you have never requested in your postbox. “A gift from heaven”, you might think, but let me remind you something “nothing comes of nothing”. Therefore, if you receive a £ 2,500 credit card, do not rush off to buy new clothes and champagne. The wisest thing to do in these cases is to slice that evil piece of plastic and throw it away. Instead, start paying in cash and keep a journal where you can record all your expenses.
So doing, you will finally feel in control of your own finances and, according to those who have already introduced this healthy habit into their daily routine, being aware of your financial position will allow you to set savings targets and meet them. If you are looking for ways to get out of debt, here are some useful tips for you to pay off your credit card debt.
If, on the other hand, you have used your credit card wisely and have no debt to pay off, make sure you pay down your outstanding balance, or the card issuer might increase interest rates on it hoping that you won’t be able to pay off your debt and negotiate with them. Why do you think credit card companies have devised all those different fees (annual fees, over-the-limit fees…)? Not to get you out of debt for sure!
Once you have made sure that the outstanding balance on your card is zero, close your account and ask the costumer service representative for confirmation. Remember that interest keeps building up between the time the card company sent you the bill and when they received your payment, so do not assume that the balance is 0 just because you paid the amount shown on your credit card bill.
Once your account is closed, you may consider requesting a prepaid card that you can use while abroad. Visa and Mastercard debit cards are accepted nearly anywhere and look just like credit cards, with the only difference being that they won’t make you poor.