If you don’t use credit
wisely, you will end up in more debt. Now it’s time to get credit smart.
Credit is part of our lives and
is often associated with unmanageable
Typically, credit has strict
terms and conditions. If you don’t use it wisely, you could quickly accumulate
debts that you’ll have issues paying back.
If you pay on time and become
credit savvy, not only will you avoid more credit interest, you’ll remove the
stress often associated with credit debt.
To remain in control of your
borrowing, here are a few ways to use credit wisely.
Use credit cards wisely
Credit cards are an easy way to
pay for goods you want, but this freedom can come at a cost.
It can be effortless to rack up
more credit card debt than you can afford to repay, so it’s crucial to remain
The top way to do this is to
monitor your spending and that you are checking your credit card statement
When you receive the credit card
statement, review the date the payment is due, and ensure you pay the minimum
payment time. This will avoid additional interest charges or substantial late
Consider setting up a direct
debit to pay the minimum amount off the balance owing each day you get paid.
Just ensure these payments do cover the minimum monthly payment due on the
Don’t borrow more than you need
Before you sign up for more credit,
it makes perfect sense to consider whether you need to borrow the money in the
With the current economic
uncertainty and rising household bills – many people are now choosing to pay
back the money they’ve already borrowed rather than borrow even more.
There are some fundamental
topics you need to answer before you borrow money.
Ask yourself if:
- Do you need to spend the money?
- Do you have other alternatives for financing the purchase?
- Can you afford to pay back the money you’re planning to borrow?
Compare all competitors
If you have to take on more
credit, ensure you consider all the alternatives. A couple of years back there
was a surplus of fast credit providers including QuickQuid, Peachy, Wonga and
Now out of those big lenders,
only Peachy remains. Ensure you examine all the Peachy alternatives,
so you are fully educated if there is a better prospect out there for you.
Never miss a repayment
Whether you like it or not, your
credit report tells a story about you. It can tell a happy one when your
payments are made on time — you’re somebody who can manage your current credit
debt and probably more if you need to borrow further.
Yet, miss a payment and the
story is a bad one. Your costs can go up, and your access to further credit is
under severe threat.
Repay your credit as fast as you can
Debt counsellors often point out
the wisdom of paying back more than the monthly minimum amounts on your credit.
Otherwise, it will take a long time to pay off your credit and will cost you
much more in interest.
Carrying debt for too long, even
if you’re hoarding it to boost your wealth, can quickly begin to feel like a
Most of us never have the money
to pay for everything we want now, whether it be a house, car, holiday or
Credit can help fill the void,
but that’s money you will need to pay back, always with interest. Typically,
the faster you repay, the less you’ll owe in total and can be debt-free.
About the author
David Bailey-Lauring is
a single father of three boys and a content writer and regularly writes
about personal finance, business, education and tech in the UK, USA, and Europe