Knowledge gained the hard way.

Credit card spending is higher than it has ever been. According to the experts, the fact that wage growth has not caught up with inflation has left many households struggling to fill the gap. While easy to arrange, useful and convenient, it’s also all too easy to get into trouble with credit cards – they may not be so obviously a dangerous way to borrow like bad credit loans or no credit check loans but the debt can quickly mount up. If you don’t want to end up in that position then take note of these key lessons we learned about managing credit card debt.

Try to clear your balance every month if you can

You only pay for credit card debt if it remains on your card for the full monthly cycle. If you buy something on a credit card and then clear the balance a week later there is no interest to pay. You’ll still pick up loyalty points etc but you are essentially borrowing for free. The savviest credit card users don’t get stuck with outstanding balances.

There is such a thing as too much credit card debt

Average interest rates on credit cards range from 13%  -25%+ – so it’s easy to see how you might get into trouble with this kind of borrowing. Even though you only have to repay a minimum balance every month, if you’ve borrowed more than you can really afford then the interest can be crippling. Learn the lesson that credit card debts – like any other – need to remain affordable or you could end up paying thousands in interest.

You can’t bury your head in the sand

The thing about credit card debt is that it just keeps on increasing. If you start missing payments because you can’t afford them then you’ll also see fees and charges added to what you owe – on top of the balance and interest. If you have credit card debt you can’t just ignore it. When it’s manageable, stay on top of balances and make sure you regularly look for better options with lower interest rates until you’ve cleared it. If it becomes unmanageable then seek help as soon as you can.

Some options are better than others

If you’ve had the same credit card with the same bank for the past decade then you might be better off switching to another provider. Credit cards can come with all kinds of great deals, from offering 0% on balance transfers to long periods without any interest to pay on new purchases. Shopping around for a better credit card deal can reduce the amount of overall interest you pay and make it easier to clear credit card debt.

Paying off credit card debt can be a challenge

Unlike other forms of debt – such as personal loans or payday loans – when you pay off credit card debt it’s very easy to spend it again. You might clear several hundred off your balance and then have a bad couple of months and spend right up to the limit once again. So, to clear credit card debts you need to have a plan and some pretty tight discipline. Pay off the debt in small and affordable increments that still leave you enough to live on and be absolutely tough with yourself about not re-spending what you have repaid.