The most common reason in people’s personal finance destruction is usually their credit card debt. Although many people find themselves overwhelmingly controlled by their credit card, they do have the power to control their spending habit and payment using their cards. Here are a few tips for you to help you take control over your credit cards and over your life:

Keep your spending below a percentage

Calculate the total household income and take a percentage of your after-tax income as a limit of your credit card spending. The best percentage is 15%. If you spend more than 15% of your income after tax using your credit card, this should be an indication that you are being controlled by a dead plastic thing instead of the other way around.

Play by your own rules

When you get your credit card statement from the bank, the first thing that the bank highlights in your statement is the “minimum amount due”. The bank wants to make sure that you are aware that you don’t have to pay more than the minimum amount that you owe. By this they are ensuring that you never fully pay off your debt and thus earning them money from your interest payment. To take control over your credit cards, you have to play by your own rules and not the banks. You set the amount that you pay towards your credit card, which should be way more than just the minimum payment. If it is possible to pay off your debt immediately, it would be even better.

Use your leverage

In this economic crisis, credit card companies would do anything to keep you as your customer. At this point you have more leverage and are in a strong bargaining position to ask for lower rates and fees. Use this leverage and call up your credit card company or bank for lower interest and fees. You can ask or gently ‘threaten’ them to leave your lender for another company or bank. It would not hurt to try and ask.

Take over your life. You have control over your credit card. Use it.

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