Understanding Money Management – A Key to Success

What is there to understand you say? Well let’s start with some basis principles of money management as it relates to credit cards. While most understand that the use of a credit card institution’s money is not free, the concept of finance charges, late fees and annual fees are not fully understood. How many times have you heard a person say, my intentions were to always pay the full amount within the grace period of usually 30 days to not incur any finance charges and fees. While great in principle, it does not always play out in practice. There are many reasons for this with one of the significant ones being there will always be a time when that payment cycle shows up and making the minimum payment looks very attractive. The credit card companies put a lot of thought into this and that is why they make it very easy for you not to pay the full amount due. So once you start making the minimum payment you are off your strategy and what happens next, the balance continues to grow and you are not making a dent in it by paying the minimum due but the credit card company is smiling. The next thing that happens is you miss a few payments and there are late fees and if you miss too many they will increase the finance charge and possible suspend your ability to use the card. At this point who is in control of your money?

It’s Not Necessarily Easy – However it is Doable

Spending for many tends to be just something that they do, while not giving it much thought until they are in an unmanageable debt situation. They see no reason to do anything different. Life is to short, and you can’t take it with you may be true but think about it, life is surely a lot more fun without the burden of credit card debt controlling it. So for many there is just a need to stop spending when they don’t have the money and to truly only use credit for emergency situations, while even in those situations vowing to pay it off in a fix amount of time. For many starting out they hear the only way to build credit is to use credit and while that is some what true this should not be confused with being over extended in credit debt. It is still very much about money management with you managing your credit not the other way around.

Manage Credit Cards – Don’t Let Them Manage You

Let it be said credit in itself is not a bad thing. When you use it to your benefit and keep it under control it can enhance your life. There are a few basis rules to follow and you can make it work for you. Select cards with perks, cash back, no annual fee, low to no finance rates (usually for a fixed amount of time) and then use them only when you have to and pay them off within the grace period. Sounds to easy right, well if this is not something you feel you can do tell them no and it doesn’t matter if you are pre-qualified the answer is still no thank you.

Figure Out What Works for You – Stick to It

What works for you may not work for someone else in getting control of spending and money management. It is essential that at a minimum you accept there is a problem and began to identify acceptable solutions. If you need the assistance of a professional, than do your research because there are so many resources available in this area for free and in most cases for a fee. You may want to start at your local library because you can be sure there is great deal of material written on the subject. Once you decide on a course of action stick with and adjust accordingly because as your life changes you will be met with new challenges. It tends to be a little easier to manage money when it is just you but what happens with a new partner, spouse, or children just to mention a few of life changes that impact your ability to manage money.

Taking Control of Your Credit – Let’s Celebrate

Taking control of your credit is a reason to celebrate. With the average America being more than $10,000 in credit card debt, getting out of debt and staying out can be a life changing event. While this amount of debt may seem small in comparison with other major purchases like a home or car, there is a significant difference with credit card debt in that it can be never ending. The 30 year mortgage on your home and the 5-7 year financing on your car are set with a fixed monthly payment, as well as an end date that is achievable if you maintain you payment plan. This is not the case with credit cards they start out small with a reasonable finance charge but if not managed grow to a very sizable amount with a comparable finance charge with no planned end date in sight. In fact the goal of the credit card company is for you to be in debt for life and they will do everything possible to help you achieve their goal. Too soon to celebrate…well lets talk about a few of the ways people have been able to make this change in their lives.