When we talk about credit cards, we rarely think of its origins, it is simply seen as the means to acquire what we want or need. However, to our knowledge, it is important to point out that credit cards origin and functionality date back to the beginning of the 20th century in the United States. Specifically, the idea arises within the offices of Chase Manhattan Bank, headed by its director, under the modality of a professional card. It was instituted in its majority form around the 1940s and spread since the middle of the century.
Now, since credit cards are one of the most widely circulated elements in commercial interaction, they are likewise a mechanism of great care for the immediate availability of money and / or products, which can be purchased immediately. In turn, it should be understood that credit cards are, due to the dynamics of their operation, processes that allow a higher interest rate and consequently a higher expense when making deferred purchase payments. By their nature, credit cards make us think that we have money, they can lead us to get into debt quickly and without control.
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Considering the above and given the undeniable convenience what credit cards represent, there are many difficulties that cardholders present when lowering the balances of their obligations or catching up on this type of debt. Therefore, we will give some tips that will allow you to free yourself from your credit card debts.
Begin with prioritizing and adjusting your budget: The first thing to focus on is optimizing expenses, classify them in a systematic and detailed way. It is advisable to carry out this classification on a scale from higher priority to lower relevance, for example: food, study, housing, mobilization, communications and finally entertainment. Once this aspect has been completed and detailed, methodically look for expenses that can be reduced, then take the money that you have free and use it to make extra payments to your card obligations.
Establish automatic debit payments on credit cards: On some occasions, the lack of discipline in credit card payments is what causes failures in the timing of their payment and the accumulation of substantial debts. That is why, by scheduling payments with automatic and recurring monthly debits, you can avoid forgetting to make payments or allocating money for unnecessary expenses. One of the tips is to use the credit cards as if they were a debit card, if possible sending the total payment in one single installment.
Focus on one debt at a time: You can identify your lowest credit card debt balance and focus on paying it off in full, then you will continue with the next debt and this will generate a domino effect until you manage to pay all your debts. You can also do the same, but starting with the highest interest rate to the lowest interest rate.
The classic and safe debt consolidation: Consolidating all your debts to make a single monthly payment and thus meet all your obligations, but making payments that are within your reach, will always be an excellent option. Let experts negotiate your debts with the banks and reduce your interest rates so that you can get rid of your debts in no time. At Premier Consumer Credit Counseling, we have qualified personnel to advise you in this regard.
However, whenever obligations are consolidated, you have to be cautious not to accumulate new obligations subsequently, as this easily becomes an endless chain of debts. Stay financially educated to avoid falling into the same vicious cycle.
To conclude, credit cards may lead you to think that you have money immediately and this can easily make you to get into excess debt. Therefore, once you acquire a credit card, it must handle responsibly, spending only what you are able to afford.