Credit card mess is usually the first sign of longer term financial troubles. These are 12 amazing action plans to manage your credit cards that you will never fall into credit card mess again. We tackle the issue from four fronts:
1. Proper credit cards administration
2. Budget (no spreadsheet, no accounting, just 5 minutes with pencil and paper)
3. A different mind set
4. Quality lifestyles
Five actions from proper cards administration
Action plan 1
Keep three cards.
The 1st card for fixed payments (i.e. handphone, insurance, utilities, subscriptions, Astro, etc.), the 2nd card for ad hoc payments like shopping, eating out at restaurants, groceries, petrol, etc. The 3rd card is for emergency. (Why such three credit cards system?)
Action plan 2
Clear the entire balances of the three cards every month.
Yes, the ENTIRE balances of ALL THREE CARDS. Not just any amount above minimum balance. The moment you leave a small balance, it adds up to the next month's balance. This is a preventive action plan, remember?
Action plan 3
Otherwise put the 2nd card away.
The moment you cannot pay off the entire balances, put the 2nd card (the card for shopping, eat out, etc.) away for one month until you manage to payoff the entire balances of the 1st, 2nd and 3rd card in one month. You will have to pay cash on day to day spending now. (More about the 3rd card here. You are not supposed to use it, remember? It is only for emergency.)
Action plan 4
Give standing order instruction to your bank to pay the FULL AMOUNT of your cards from you salary bank account every month. This will not only ensure your credit card debts are cleared every month, it also ensure you will control your expenses at the point of charging the expenses to your credit cards.
Action plan 5
Review, reduce and/or cancel fixed payments that you charged to the 1st card.
If you still cannot clear the entire balances of your cards every month even after you have put your 2nd and 3rd card away, you should then review your monthly fixed payments that are charged to your 1st card. Do you really need Astro? Can you cut down petrol or hand phone expenses? Go through your 1st card statement and decide.
Still have problem to clear the entire outstanding balances monthly? Ok, now, it is not about prevention, it is about salvation from credit card debts. We will add another article on this soon. More action plans on prevetion of cerdit card debts in Part 2...
12 amazing action plans avoiding credit card debts mess...
Part 1: Preventing credit card mess (1)
Part 2: Preventing credit card mess (2)
Part 3: Preventing credit card mess (3)
A refined article of twelve action plans in preventing credit card mess published in EzineArticle.