Credit cards make life easy, financially. But rely on them a bit too much, and you could find yourself landed with a huge debt. It’s best to maintain a steady relationship between your credit card and use and payment, making sure you pay enough to keep yourself out of having to scoop up huge amounts of money one sudden month.
But the game becomes more complicated the more number of cards you have.
How to Manage Multiple Credit Cards
When you max out multiple credit cards each month, but pay only the minimum amount due, you could find yourself racking up a debt for yourself. This can be a very slippery slope. And getting settled with having to pay amounts as large as a few thousand dollars before you reach even your mid-twenties, makes your personal financial management a stressful prospect. At Millionaire Mob, we participate in credit card churning to maximize our travel rewards from credit cards. We pay off our entire balance each month, but keeping track of our credit cards is a job in itself!
Here are a few tried and tested methods to keep yourself out of debt:
- Set a spending limit on each of your cards
Spending money on your credit card is like spending money you do not have. This is all money you have to pay back at the end of the month to your creditor, or in other words, your bank. Once you limit yourself to a budget, you will be able to better discipline yourself to spend only that amount which you can be sure of paying off, without leaving a balance to be paid off for the following month. Remember, having to pay off a balance means having to pay off interest on that balance, too.
- Know your credit cards
What is the spending limit allowed to you on your credit card? What are the payment terms and conditions? Which, out of all your credit cards, has the cheapest rate of interest on the balance amount to be paid? What are the reward points each card offers?
Getting an answer to these questions allows you to understand how to manage your spending on each of these cards better. If you have to have a balance at the end of the month, knowing which card offers the lowest interest rate will help you draw up the smallest debt.
- Keep a reminder to pay your dues
It’s easy for the payment dates to slip out of our minds. But this tiny slip can cause you to be settled with either fines for late payment, or interest on the balance. Create online reminders for yourself to avoid this, such as on Credit Karma, or set up a reminder on your cell phone. Alternately, set up auto-payments so that the due amounts are auto credited from your account each month.
- Discuss the payment date with your credit card provider
Oftentimes, the problem is not with the actual credit card debt itself, but the payment due date. It might be a few days before your monthly income comes in, or a few days before or after your other bill payments, making it easy to miss. In such a case, discuss with your credit card provider if they’re willing to move the date around a bit. Most providers are happy to comply and to fix a date so that you don’t miss a payment.
- Make sure your cards are not stolen
The more cards you have, the easier it is to lose track of them. And the easier it is for a thief to steal your information. Check all your purchase records, and keep track of where each card was spent. If anything looks suspicious, get in touch with your provider immediately.
In the end, it is all about effectively managing your cards. Set yourself a spending limit, know your provider’s policies and learn to keep track of your expenses per card, and it’ll be an easy management of affairs.
Author Bio: Millionaire Mob is a blog focused on things that we truly enjoy: Travel Photography, Travel Rewards, Passive Income, Dividend Growth Investing and Personal Finance advice. I hope to provide the best advice to help you learn and grow along the way. Join the mob of financial freedom experts and escalate your life. Follow us on Twitter @MillionaireMob2 or Instagram @millionaire.mob!