Webblogs Money
What is the Best Way to Repay Store Cards?

What is the Best Way to Repay Store Cards?

A store card works very much like a credit card where you can use it to buy things and then you will get a bill each month showing how much you owe. You will either have the option of repaying just a small amount and paying interest on the remaining balance or paying off the full balance. Although the statement does not normally state this, it is also possible to pay off any amount above the minimum up to the maximum. These different options have advantages and disadvantages for you and it is worth giving them some thought. – Repay minimum balance – Doing this is necessary if you want to avoid extra charges and negative reports on your credit report. It is usually just a small amount and should be easy to manage. It is best though to set up a direct debit to make sure that you definitely pay it. Paying off this small amount means that it is easy to manage the repayments on the store card. You will only have to pay off a very small bit, usually the interest plus just a small amount of what you owe. Although this can seem really good, it can be wise to consider whether it is a good idea to only repay this small amount. It will mean that the debt will be outstanding for a very long time and you will be charged a lot of money for having the debt. This means that unless you cannot afford to pay more than the minimum balance then it will be a sensible idea to pay more money off the bill so that the debt is not outstanding for so long and does not cost you so much money. – Repay bill in full – doing this means that you will not be charged any interest. This is great because you will be able to take advantage of having the store card, delaying paying for your purchases and any other benefits that come along with the card but you will not have to pay anything extra for them. It is possible to set up a direct debit to repay the full outstanding balance each month and then you do not have to remember to do it yourself. The only thing to be aware of is to make sure that you do not spend too much on the card that you will not be able to afford the repayment or that once you have made the repayment you will struggle to cover the rest of your monthly costs. – Partly repay bill – this can be a good option for anyone who would like to repay more than the minimum balance but cannot afford to repay everything that they owe. It means that you will whittle away more of the debt and keep the costs lower compared with only repaying the minimum. You might want to set up a direct debit for an affordable amount or just pay off as much as you can afford when you get the bill. If you are hoping to pay it off as quickly as possible, then it would be sensible to avoid using the card if you can or else you will build up more debt. Choosing the method that will be best for you will very much depend on what you can afford to do. You will find that it is always cheapest to pay off the full balance and so it is sensible to do this if you can. If you cannot afford to then pay off as much as you can afford to in order to keep the charges as low as possible. Make sure that you are aware of how much you are spending on the card and this will help you to keep it affordable. The problem with store cards is that they are very easy to use and it can be all too tempting to buy more than you can really afford using them because you know that you will not have to repay them immediately. However, you need to keep in mind how much extra this will cost you and think about whether you really think that it will be worth it once you add on the costs of borrowing to the cost of the items that you have bought. Imagine if they had cost that much in the first place as to whether you would have bought them. Often card holders will get a discount and this can tempt you to spend more money. However, make sure that you are buying things because you need them rather than just because they seem to be a good deal. If something looks really cheap, make sure that you need it. Retailers try to make us think that something is worth buying just because it is a bargain, when it is not a bargain if you are buying something that you do not need or want.
Is it Wise to Have Many Different Credit Cards?

Is it Wise to Have Many Different Credit Cards?

We have so much choice when it comes to credit cards these days and this can mean that there are many of us that actually have several of them. This can mean that we have access to more money which can be handy and that we have more flexibility when we are spending. However, there are many problems that might occur as a result of having several cards which are worth considering – – Lose track of spending – it can be easy to lose track of spending when we use cards anyway. However, if you just have one card, you can check the balance regularly and you will be able to see whether there is enough money to be able to continue spending on it or whether you need to hold off as you will find it too expensive to repay it. Checking the balance like this on more than one card can be a hassle and is easier to forget to do. It can be easy to use the cards without thinking that you are actually spending money or thinking about having to repay the money when the bill comes. – Forget to pay them – with a credit card you have to repay a small amount each month and this tends to cover the interest and maybe a little bit more. However, if you only pay this then you will continue to keep the debt for a long time and will keep paying interest on it. The sensible way to use a credit card is to repay all of the outstanding debt each time a bill comes so that you have no charges to pay. You can set up a direct debit for this and therefore you will not be able to forget to pay it even if you have lots of cards. However, you will need to be prepared for that money leaving your account as it will obviously disappear leaving you will less money. If there is not enough there to cover it, you could end up going overdrawn or struggling to buy everything that you need. – Overspend – it can be really easy to spend more money than you can really afford to which could lead to you needing to find even more credit such as that offered by payday lenders. Having a credit card can to some, feel like a lot of money that they can spend. It can almost feel like you have been gifted money that you can use to treat yourself to things with. This can then lead to lots of spending. It is good to always keep in mind that this is not money to spend but money to borrow. If you repay it quickly then you can borrow it for free but if you do not pay it back when the bill arrives you will be charged interest to pay on the debt. Therefore the money that you are spending is costing you money and you need to think about whether those things that you bought were really worth it when you are having to pay that charge for them. You need to bear in mind that the charge will go up as well – more debt – if you have more than one card then it can be much easier to build up more debt compared to just having one card. This could become a big problem if you leave the debt to accumulate for a long time as it could be really hard to then pay it back. So as you can see there are a lot of potential problems that could take place if you have more than one credit card. Obviously just having one card is something that you need to be careful with as you could end up spending more than you can afford to pay back but the risk is increased with the more cards that you have. It is therefore worth thinking hard before getting more than one card. Consider whether it could be better to try to increase the credit limit on the card that you have rather than getting a second card in order to get more money to borrow Do keep in mind that it is borrowing so the money is not there for spending as if it is a gift, but it will need to be repaid with interest. It can often be tempting to get a second credit card when you have spent the credit limit on another. However, this could just mean that you will pile up even more debt and end up in even more of a mess so you need to think about it all really carefully. Consider why you have spent so much and whether you need to tackle that and pay some off, rather than thinking about taking on more. Therefore, be very careful when you have even on credit card and be even more careful if you have more than one.