Getting swamped with different credit card bills each month isn’t a position anyone wants to be in.
Finding an effective way to organise your credit card bills can be frustrating for many. In order to regain control of your finances and organise your debts, you need a way to make sure you pay them on time, every time.
The following credit card bills, suggestions and tips will help you get organised, especially if you seem to get swamped with different bills each month. By being better organised, your chances of staying out of money trouble will increase.
How to manage your credit card bills more effectively
It sounds simple, but sometimes getting organised can be overwhelming at first. You can start by allocating ten minutes a night towards getting your bills, notices and correspondence from your bank sorted out and into an alphabetised folder. This way, if you ever have to dispute anything with a utility provider or bank, or you want to calculate the costs of a particular credit card over the year for example, you have the information to be able to do it.
Tips and Tricks
Here are some other helpful hints when it comes to better managing your credit card bills.
- If you have a smartphone, tablet or a diary set yourself reminders about when payments are due. This, in conjunction with a good budget (more information on that below) can help you manage your many credit card bills.
- Most lenders expect a payment monthly, and the majority of people will pay the bill when the statement tells them to. You may find it much easier to keep up with payments if you instead plan to pay a portion of the amount due each time you're paid.
- If you're paid weekly, divide your minimum monthly payment into four and pay a quarter of the bill due every time you get paid. This way, by the time the due date rolls around, you should have paid four payments that add up to the amount the lender expects.
- Always be sure you pay enough throughout the month to cover at least the minimum amount due. Lenders will charge penalty rates and overdue fees on overdue accounts, so make sure you always pay a little more than you need to, a little more regularly and you should find it more difficult to fall overdue with payments.
- If you can't remember to make your payment each time you receive your pay cheque, arrange an automatic bill payment or direct debit agreement to have your bill paid automatically when your pay arrives in your account. This will make it much easier to stay on time with your payments.
Treat the source of the problem
Not being able to manage your credit card bills might stem from a greater problem. Perhaps you're spending more than you're actually earning, or maybe you've got too many credit cards when you could consolidate them into one card with a larger limit. Whatever the case is, start by writing a budget.
A budget is basically any document where you write down exactly how much you make net each week, fortnight or month (whenever you get paid). This needs to be as accurate as it can be.
Next, write up a list of your outgoings. These should include everything from doctor and dentist visits to insurance, rent, savings and entertainment expenses. Be as realistic as you can with some of these, as being inaccurate will throw everything off.
To reduce the risk of making an error use a calculator and let it do the work for you.
Once you're done you'll know exactly how much you can afford to spend and can compare this to how much you're actually spending using your credit cards. This can help you identify areas you need to cut down on.
Consolidate your debts
One way to manage many credit card bills is to merge them. This is referred to as debt consolidation, and involves using a personal loan to pay the credit cards out. You then pay this one loan off over a number of years.
This can have drawbacks as the interest rates for these type of loans aren't that much lower than a credit card, and it may not teach you how to stay out of credit card debt in the future; however, it can help you streamline your debts into something easier to pay off.
Use a debt strategy
There are many debt strategies in place for those with a high number of credit cards. One such strategy is the debt snowball strategy. It involves putting your credit card debts into order from smallest to biggest. Pay the minimum repayment for each debt apart from the smallest - for this debt you pay the minimum repayment plus as much as you can comfortably afford towards paying the debt off.
Once this is paid off you move towards the next smallest debt. In this case you pay the minimum repayment plus the repayments you were making towards your previous debt. Once you pay off this next debt you move onto the next and repeat the process.
As you can see the amount you're paying towards your debt slowly increases as you pay off bigger debts, and you start to slowly pay off more and more debts.
Consider a balance transfer
Balance transfers simply involve you transferring your balance from one or more existing cards to a new card. In return for signing up for the new card your card provider will give you a special rate of interest for a limited amount of time. This rate of interest is usually low and means you get a better chance of paying off your bills.
If you have a number of cards this can be a good option, as many balance transfer promotions allow transfers from more than one card.
You're usually able to transfer between 90 - 95% of your approved credit limit, so be aware that you may not be able to transfer your whole balance over, but balance transfers can still be a great way to better manage credit card bills and pay less in interest.
If you need more help managing your credit card, please check out our Credit Card Management Guide