Strategies for Getting Your Credit Cards Under Control

By Angela Monroe - January 31, 2020

Credit cards certainly have their uses and they can be really helpful to many people in different financial situations. Yet it’s easy to misuse credit cards and quickly see your finances spiralling out of control. Learning how to use your credit cards effectively will keep your credit card debts under control. Read this article to help you keep your credit rating on track and avoid bad credit.

Out of control

There are a few things that could raise alarm bells. And it maybe too late to realise that your credit card debts are getting out of control. Being aware of these signs makes you able to quickly spot them. And act quickly to make things better.

  •     You’ve maxed out your credit cards or gone above your credit limit
  •     You can’t afford to make repayments due
  •     You’re missing repayments regularly or are making late payments
  •     You’re using other types of debt to pay off credit cards
  •     Your credit rating has dropped
  •     New applications for credit have been denied

If you’ve experienced any of these situations, then you can say your use of credit cards are out of control. You’re likely to feel extremely stressed and anxious about getting back on track financially. Bad credit doesn’t have to mean the end of borrowing, you just need to deal with the situation head-on.

Getting your credit cards under control doesn’t have to take years. There are lots of simple steps you can take today which can lead you back to a better financial track.

Start to budget

This is crucial as you need to figure out your cash flow. Identify what money you have coming in and how much is going out each month. Keep an eye on your expenses, especially that which you spend on credit cards. You should figure out what spending is essential (such as utility bills and food costs) and which is more luxury based and could be cut out.

By understanding where you’re spending your money and how you can work out why your credit cards are out of control and how best to sort them out.

Get rid of high-interest rate debt first

Look at all of your credit cards and check which of them have the highest rates of interest being charged on the debt. These high-interest rates mean that the money you’re paying back each month is substantially increased and you want to try and cut this down. Some credit cards charge as high as 20% interest which can make it almost impossible to pay back debts. 

Aim to improve your credit score

Many people aren’t aware of their credit score but it’s quick, easy and free to find out where you stand when it comes to credit rating. Simply go online and you’ll be able to see your credit score – giving you a better idea of whether you could apply for a credit card with a better rate of interest than you are currently getting.

High-interest credit card debt is the hardest to pay off as you’re continually paying a substantial amount of extra money in interest. If you can switch to a different credit card, you could see immediate savings.

If you have bad credit, there are a number of ways to improve your credit rating. You’ll need to prove to a lender that you are responsible as a borrower – this can be by showing evidence of a fixed address, a regular salary or previous loans that have been paid in full.

Limit your credit card usage

It’s become very easy to use your credit card quickly, and without really thinking about the money that you’re spending. If you do online shopping, try to delete your credit card details from immediately appearing at the checkout – having to manually enter them each time may just make you reconsider your purchase.

You’ll also want to think about how you use your credit card on a day to day basis. Fewer people are carrying cash these days but it could help you in the first few months of trying to get your credit cards under control. Set yourself a tight budget and if you’ve spent it all, you won’t be able to go above and beyond it as you would with a credit card.

Don’t just switch your credit card spending elsewhere

There’s no point in simply transferring your credit card spending elsewhere. You need to properly address it and cut down on the spending so that you live completely within your means and only spend what you can really afford.

It’s tempting to simply use other methods of credit to enable the money or purchases you enjoyed through credit cards  – but you’ll simply be transferring the issue elsewhere.

Angela Monroe
Angela Monroe is the Community Manager at The Positive Group, specialising in giving people the information that they need when they need it, and putting you on the path to a fair financial future. She has 8 years of experience in helping Australians find the right finance solutions, and regularly contributes articles to empower Australians with the knowledge they need to become financially healthy.

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