We here at WalletPop have spent plenty of time telling you about the big changes you can make to pare down your credit card debt and live a more financially stable life. While that's still a good goal, maybe a major lifestyle change isn't in the cards for you right now. Or maybe you're already well on your way out of the red (if so, good for you!) .
In either case, there are a handful of things you can still do -- right now, with the income and expenses you already have -- to shave some weight off that bill when it arrives at the end of the month. None of these are big changes -- we're not advising you to move to a cheaper town, drive an old car or deep-six your cell phone. These are all simple, manageable tactics that will help you shave a few of your hard-earned dollars off your next credit card statement -- and give you more control over your money.
1. Pay what you owe early. If you carry a revolving balance, interest is calculated by the day. If you can manage it, pay the bill as soon as you get it, recommends Natalie Lohrenz, director of counseling at the Consumer Credit Counseling Service of Orange County (Calif.). "Interest is charged on an average daily balance. The sooner you pay it every month, the less interest you're going to get." So if you can make payments even a little earlier than your due date, you'll shave off a fraction of the interest owed.
Lohrenz also repeats the advice we've told you many times before: If you have a little extra cash at the end of the month, make more than your minimum payment. New CARD Act rules stipulate that issuers now have to spell out in black and white at the top of each statement how long it will take you to pay off your bill if you just make the minimum payment (and keep in mind, that's if you don't add anything more to the existing balance!). Resolving to shorten that time span by just a bit can put money back in your pocket.
2. Leave it at home. We don't mean forever -- this isn't cold-turkey deprivation we're talking about. Just take your credit cards out of your purse or wallet for a week to get some insight into how and where you use them, which should tip you off if you're overspending on day-to-day purchases. If, for instance, you have a revolving balance and you put consumables like food and gas on the card, you'll be paying for those things long after they've been used up. On the other hand, if you're prone to impulse spending or "retail therapy" when you're having a bad day, not having instant access to those cards may help you realize this -- and help keep your impulses in check.
3. Ditch the memberships and subscriptions. Marketers love the "Try it free for 30 days" pitch because they're betting there's a pretty good chance you'll forget to cancel during that first month -- and maybe even forget about the charge entirely. If you're a heavy credit card user, these charges can fly under the radar because they're often in the $25 to $30 range, says Alberta Gibbs, a certified credit counselor and nearly eight-year veteran of InCharge Debt Solutions in Florida. It's an amount you might not notice if you don't check your statement carefully.
What's more, you might not even be getting your money's worth out of that membership. "In [a consumer's] mind, when they got the membership, they thought they'd use it more often because that's how they're pitched," Gibbs says. Don't listen to the marketers, she advises. Instead, ask yourself how often you actually use that membership each month, and drop it if you're not getting your money's worth.
4. Don't pay for group outings. It's something we've probably all done when we're out to lunch or dinner with friends: You don't have cash, so you say, "Oh, I'll put it on my card," and your friends fork over their greenbacks. "People do that all the time, and I don't recommend it," says Gibbs. First of all, what's the likelihood you'll run that cash over to the bank and deposit it in the account you use to pay your credit card bill? Right! Slim to none. That money will probably be spent on other day-to-day expenses, and the charge forgotten about until the bill comes. But if you carry a revolving balance, Gibbs points out, you're basically stuck paying interest on your friends' meals.
"If you spend a lot on eating out, going to the movies and so on, don't be afraid to tell your friends upfront you're trying to cut back," says Lohrenz. If you let them know ahead of time and maybe even suggest an alternative -- a BYO movie night with snacks at your place, maybe? -- you'll be less tempted to succumb to peer pressure and join them for that afternoon at the driving range or round of after-work Cosmos.
5. Put on the brakes. "Give yourself a waiting period for big-ticket items," says Lohrenz. Anything that costs more than $50, for example, gets a two-day waiting period. More than $100? Give it three days. "A lot of times, 48 hours later the impulse is gone," she adds. Since so much of the marketing to which we're subject these days is geared toward convincing you to buy right now, hitting pause will help give you the clarity to determine if the item truly is something you need or something valuable, or just a passing whim.
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