Depending on your discipline with credit cards, they can be a huge benefit by getting cashback using for spending, or the death of you with overspending and interest charges. Credit cards can be stressful, even if you are on top of your finances, so why make it even worse by juggling multiple cards, due dates, payment balances, and keeping track of which reward is for which card. Give yourself a break and save a few gray hairs by simplifying credit cards the best you can.
Limit the Number of Cards
Using multiple credit cards for spending can get tricky when it comes to payment dates, balance, and interest on each card, so why not limit to only one card with a balance, while the rest are at zero. It is important to leave the remaining cards with a zero-balance open, and not close them, as closing could reduce your credit score by lowering the available credit. If you are worried about using the other cards, then simply cut them up, that way you will not be able to use them, while the accounts will remain open.
Monitor Account Statement
Now that you are down to using only one credit card throughout the month it will be easier to track spending. Take a look at the previous month’s statement and go over line by line every dollar spent and split up into categories such as necessary and unnecessary spending. If you need to take it a step further, you could break up the necessary spending into further categories such as monthly expenses, gas, food, although the food spending will most likely trickle into the unnecessary spending, as down the road you can hope to reduce the number of times eating out.
Pay the Full Balance Every Month
Some will say that automated billing payments are necessary in order to simplify credit cards, but that will only work if you are paying the full account balance. Paying anything less than the minimum payment will only lead to interest charges that will take over a majority of the monthly payment and limit the amount of principal balance that will be paid. By making the entire balance payment you will eliminate any extra charges in interest and start fresh each month, although you will need to make sure the regular spending occurring throughout the month will be able to be paid in full the next month.
Try Not to Ignore Rewards
With so much competition between the creditors trying to win over your business, as long as you have a great credit score, they should be lining up to provide you with rewards in return for spending. When figuring out the credit card you are going to use regularly, you should pick the one with the maximum rewards, such as cashback, miles, or point for gift card redemption. If you do not have a rewards card, then it would be worth the initial credit score hit for the application inquiry in order to save on rewards the remainder of the year.