Master of Money Management

Cedit Cards -Take a break-but not with your credit card payments

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Have a break but don’t have one with your card payments.

It’s almost that time of year when your credit cards start to burn from the friction in the swipe machines. Credit cards are your best friends when you need to spend large amounts of cash over the festive season. They are particularly useful when you go on holiday. When you travel, you don’t have to carry wads of cash and they are a necessity when booking a car rental, hotel or plane ticket. They can also help to bridge gaps in cash flow. While many people use credit to fund their holidays, it becomes problematic when they fall behind on their bills. Sometimes a missed payment can be an oversight, or it can be due to a few too many seafood dinners on the beach. Either way, a missed payment is going to bite you harder than the Tabasco on your oysters.

A credit card is best utilized when you pay off most of the balance at the end of each month. This ensures that you will be able to access the credit going forward. Going on a spending spree just because you can, is not the way a credit card should be used because once it is maxed out and you can only afford the minimum payment each month, it’s not much use until you have paid it down.”

Holidays are a time where you may be tempted to overspend so it is important to budget carefully. Work out how much you will need to pay when you return from your vacation and keep it aside for the payment. “A great way to get the most from your card is to pay in some cash each month to create a positive balance, this way the bills will not be so painful to endure when you return.

Sometimes people are having so much fun on holiday that they genuinely forget to pay their bills, or they may not have internet access. If a credit card payment is missed it will negatively affect your credit rating. Many people do not realise that a late payment, even if it is only a few days late, will affect their credit records. While a missed or payment will not be reflected as an adverse report, it will damage your payment profile, even if you catch up the following month. Too many missed or late payments on your payment profile will definitely reduce your chances of getting access to further credit. A great way to make sure your payments are made on time is to sign a debit order, it really takes the stress of remembering away and it ensures that the bill is prioritized.

If you find yourself struggling to make payments have a look at your lifestyle and spending habits, you may be living beyond your means. Cut back on unnecessary expenses and seek assistance to help you budget more effectively. A holiday is meant for rest and relaxation, the last thing you need is to worry about unpaid bills”.

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