If you dread receiving your monthly statement, the chances are you are misusing your credit card.
Jonathan de Beer, head of collections at FNB Credit Card, says a credit card can be quite convenient and rewarding if you need safe and instant access to cash. However, you can easily fall into an unnecessary financial predicament if you are not careful with your spending.
Five telltale signs you are mismanaging your credit card:
- Feeling guilty after spending
Guilt could indicate that you are either buying what you do not really need, buying without checking your budget or you know you shouldn’t be making the purchase, but you do because you can.
- Can’t pay extra on your credit card debt
If you can’t even afford to make an additional payment on the required minimum monthly amount, you could be heading for trouble and need to carefully monitor your spending.
- Getting a shock when checking your statement
A good debt management strategy involves knowing your current financial position and putting measures in place to manage it. This involves keeping up to date with your spending on a regular basis.
- Shuffling debt between different credit cards
Having multiple credit cards and using them to settle your debt should be avoided at all costs, as this could leave you in serious financial difficulties.
- Not saving because of debt
Being overstretched financially to such an extent that you are living off your credit card and cannot afford to save leads to money problems, especially when dealing with unforeseen emergencies.
De Beers says that if you notice any of these signs, or find you’re spending beyond your means, it is not the end of the world. There are important steps you can immediately take to gradually turn your situation around: list all your debt; spend carefully and only when it is absolutely necessary; formulate a realistic budget and stick to it, and try to pay a little extra towards your credit card debt every month. “In extreme debt situations consumers are advised to seek expert advice as soon as possible in order to minimise the impact,” concludes de Beer.
Source: FNB. Images: Pixabay