With so many credit card offers and news coming onto the market, it’s hard to find anyone who doesn’t have a card in their pocket today. And it can be a great means of payment for providing some benefits, such as points and cashback . The problem occurs when the bill is large and we do not pay the invoice: interest is one of the highest in the market.
Do you know what a big trap this is? The size of the card limit. Good Lenders Bank did some research and found that a lot of people have been using a high limit amount every month.
It’s a snowball! The credit card can even be a bigger villain if it is used in conjunction with the overdraft. The person gets involved, spends a lot on the credit card, is unable to pay and uses the overdraft to be able to afford the invoice.
The Good Lenders Bank survey shows how much people have used the credit card limit. That is, if the limit is $2 thousand, does the consumer use $500 (25%), $1000 (50%) or a value above that?
Of the total number of people surveyed, 12% use more than 50% of the limit. The percentage is higher as income decreases. For Gold cards, whose income is in the range of $1,000 to $7,000 per month, the percentage reaches 13%.
% of credit card limit used monthly
|Using the credit card limit||Overall average||Gold (income from $1 thousand to $7 thousand)||Platinum (income from $7 thousand to $15 thousand)||Black (income above $15 thousand)|
|Up to 25%||59.84%||55.49%||62.65%||67.37%|
|25% to 50%||28.55%||31.53%||27.16%||22.64%|
|More than 50%||11.60%||12.99%||10.20%||10.00%|
In order not to curl up, the ideal is to always have a periodicity to accompany the card bill, either in the card application or even in services such as Good Lenders Bank; set a spending cap on the card and use no more than the amount you stipulate; and if the invoice is higher than expected, use a personal loan to pay it, since the interest is much lower.
For you who are already on the credit card revolving and do not know how to get out of this interest, I have separated 6 tips to help you!
Collect all debts
Before thinking about borrowing, collect everything you need to pay, do the math and understand what the ideal amount will be when applying for your credit. Thus, you will not run the risk of forgetting some debt, or asking for amounts that do not match what you need.
Oh, don’t forget: you need to organize yourself so that the installments of a possible personal loan will fit in your pocket for the next few months, okay? So, take this time to understand your financial health and take the next steps aware of how it will affect your budget in the coming months.
Contact the institutions and negotiate a discount to pay in cash
Now that you know what your debts are, it’s time to get in touch with each of these institutions and negotiate a cash discount. It is very possible for you to get a good discount, or at least a reduction in interest, including on your credit card. And negotiating is the most important part of that process.
Search for cheaper interest loan options
Start researching which financial institutions can offer you the credit you need, with low interest rates and installments that fit in your pocket. This is not a time of despair, so research calmly, do simulations and understand how much interest you will pay for this credit.
We have already made a post to help you choose where you will get your credit, in addition to bringing some care so you don’t fall for scams. Just click here.
When you receive, pay immediately
Now that you have applied for your credit, remember to pay all your debts as soon as the amount falls into your account. Because we know, money in hand is tempting. So, don’t forget the reason why you asked for the loan and pay off everything you had planned at the beginning of the process!
Decrease or ask to cancel your credit card and overdraft limits
You must have strict financial control in the coming months. If the credit card or overdraft limit seems to be enemies in this process, ask to lower the limits or suspend the card until you feel safe again to use or have them there. Remember that in the case of overdraft, you even pay for having this limit if the amount exceeds $ 500, even if you do not use it.
This is a time you must be aware of what can move your financial life forward. So, feel free to cut and decrease expenses.
Pay the installments on time
Most importantly, be sure to keep your loan installments up to date. Get organized, pay the credit as soon as you receive your income. That way you keep interest rates low.
Remember, every financial process must be done calmly and knowing that it will affect your income in the coming months. So make a conscious use of your credit card and understand everything you can about this type of credit!