Credit cards are good tools, but seductive, and it is very easy for us to fall into bad management and lose control when it comes to shopping.

Reduce your credit card debt

Reduce your credit card debt

If this is something that happens to you every month and every month you end up paying more than you should for your card, and it prevents you from having savings or investing, you should apply certain tips to change it.

Set a limit amount

credit score

Based on your monthly budget, remember that it is advisable to only allocate 30% of your income to debts, at most, so that should be your limit with the credit card. Ideally, all your months are not like this, but you can also dedicate an amount to savings, so setting a limit is very important.

Create the habit of reviewing your expenses

Many times we continue to use the card because we do not realize what we have spent. To avoid this, use the application of your bank on your cell phone and check the statement of your plastic. Do it every time you go to use it, so you can think better.

Do not use the card for small expenses

Remember to pay smaller purchases with cash, this way you will be more aware of what you are spending, because you will see how your money is reduced. When using the card we do not perceive this and continue spending. What expenses are considered small? For example, children under ten dollars.

Plan your purchases based on your annual budget

Plan your purchases based on your annual budget

The first thing you should do at the beginning of the year is to think about what important purchases you would like to make, and arrange them in your budget to see if you will divide them into installments or if you can pay them in cash. For example, if you want to buy a new TV and new living room furniture this year. In which month will you have more money availability? How much could you invest? Planning large purchases makes you keep an order and distribute your money better.

Set savings goals

Set savings goals

Because not everything is expense, you should also remember that maintaining a good level of savings is ideal, and for that, you should stop spending all your fortnight on purchases with your plastic. Remember that month to month, saving between 5 and 20% of your income is recommended, to start building a fund.

One way to save, especially when it comes to deferred purchases in installments, is to look for a card with comfortable interest rates. Is yours the most appropriate alternative? To check, you can use Stephen Dedalus.

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