Credit Card Hacks - 7 Easy Steps for a Better & Debt-Free 2020

By Neha Goyal
  | Published: 14 March 2020 | Last Updated On: 12 February 2021

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A credit card has always been a substitute for easy money. For those people who have a fixed source of income, getting this plastic card in hand is just like a key to all-time money access. But note that, this financial instrument is beneficial for those people who know how to utilize it wisely. Not only it helps in improving your credit rating but also some credit card offers rewards for items and things that you are purchasing by using that specific card.

But the main problem with the credit cards is they are easily mismanaged. Most of the time people get into the trap of credit card debt without even realizing it. And it is not everyone’s cup of tea to get out of debt.

So, if you are also into the debt trap and you are looking for effective ways to get out it this year then you have come to the right place.

Read this article to know the handy tips for a better and burden-free 2020.

Try to Avoid Things That You Can Not Afford Easily

It has been noticed that many times people due to peer pressure or just to maintain their status, purchase expensive things which they don’t require and can’t afford easily. They don’t even give a second thought before taking action, considering the fact that they will need to pay back for it later.

So, one should always avoid purchasing such expensive things which are going to increase the burden of their pocket unnecessary. It is a wise idea to buy only those things which you can afford easily so that you can easily pay for it later without getting into the debt trap.

Pay Your Credit Card Bills Always On Time

You should always pay all of your credit card payments at the right time as it is undoubtedly one of the most effective ways to avoid getting into the debt trap. Also, being late on your credit card payments is troublesome for several reasons. First of all, you will have to pay a late payment fee each time for making a late credit card payment. And secondly, even one single late payment can take a toll on your credit score. Therefore, it can make it tough for you to borrow credit cards or other finances in the future.

In order to make your credit card payments on time, you can set a reminder in your system or phone regarding the same so that you can stay alert ahead of the payment due dates. In addition to this, it is advisable to keep your monthly spending as low as possible so that you don’t have to make late credit card payments because of the lack of funds. By following all these tips, you can stay away from making the credit card debt and will pay off your outstanding dues at the right time.

Try to Pay Your Credit Card Bills in Full Every Month

If there is a month where you have a lot of unplanned or uninvited expenses from which you have to deal with, there is a possibility that you may comfortable making only minimum credit card payment. And while it is not ideal, carrying a small outstanding balance for 1 or 2 months is not going to leave a huge impact.

However, things get more difficult to handle when you regularly make minimum credit card payments and let your remaining outstanding balance compound. Not only the interest rate will move up but also your credit rating will also affect negatively. That is why your credit card utilization needs to stay at 30 percent so that you can pay your credit card bill in full every month. This way you can avoid being trapped into the debt trap.

Use Balance Transfer Facility When It Makes Sense

Try to avoid the balance transfer until & unless you have a solid reason for using it.

If you want to transfer the outstanding balance of your credit card to another one, make sure that it is in your favor like it comes to you with a lower rate of interest than the previous credit card.

Else, your outstanding balance will only increase because of the high balance transfer fee. And yes, there are several rewards credit cards in the UAE that offer a balance transfer facility and charge a high balance transfer fee from the customers. In such scenarios, you should avoid balance transfer so as to avoid getting into the debt trap.

Do not give Your Credit Card to Others

Many times people give their credit card to their family members or friends and then they end up affecting your financial health negatively.

When someone uses your plastic card, there is a possibility that he/she may use it irresponsibly or make the wrong use of it by making payments just to meet their personal needs.

As an outcome, the credit card bill that will come up can increase your financial burden and you may fall into the debt trap. That is why, never get ready to give your credit cards to others. Just say no to them in order to avoid getting into a debt trap.

Go Through the Terms & Conditions

Make sure, you go through the terms & conditions carefully which are related to your plastic card. And try to understand each and every point mentioned in it so as to avoid falling into the debt trap.

Also, you need to pay attention to the application of interest on your credit card account which is going to charge. In addition to this, you must know when the rate of interest will go high.

By knowing all such things, you can at least take some proactive steps in order to avoid getting into a debt trap as well as maintaining a healthy financial life.

Read Your Credit Card Statements

You know what your credit card number might go into the wrong hands at any point of time. It is quite easy for a fraudster or hacker to make unwanted charges onto your credit card without even letting you know.

So, if you go through your credit card statements and notice such fraudulent charges that were not made by you, you can at least dispute them with your credit card issuer to avoid paying for them as well as prevent it from being utilized illegally again. And then, Credit Card Company will replace your card with a new card by charging you a replacement fee.

The Bottom Line

Although clearing up your plastic card debt takes some time and requires self-control, the aforementioned points are not difficult to follow. Whether it’s rewards credit cards or just an ordinary credit card, they can become a very solid and helpful financial tool once you pay off your outstanding debt at the right time and also learn the technique to use them responsibly and sensibly.