As inflation surges, credit cards are a way many Americans can afford necessities. While debt piles up, there are ways to handle it, avoid mistakes, and some credit cards have perks like Amazon gift cards.
The cost of living has risen so high that more Americans now are living paycheck to paycheck than before.
It’s important to try and get a handle on managing your credit cards and debt to help avoid bigger financial issues in the future.
Paying credits cards off can seem impossible, but there are ways you can manage your debt
Racking your credit cards up is easier to do than paying them off, unfortunately.
Unless you keep a close eye on your bill, if you swipe your card for everything you may lose track fast.
Your statement will show a summary of what you have spent for the month and the balance.
It also shows your minimum monthly payment and when it’s due.
The minimum payment is the lowest amount you’re required to pay for the month.
While it’s suggested you pay more the minimum, if you can’t then you should at least pay the minimum.
According to CNet, 9% of credit card users missed at least one payment in the year 2021.
This year, credit card balances are even higher than last year without financial aid like stimulus payments or child tax credits.
The Federal Reserve raising interest rates to try to offset inflation has only pushed interest for credit card debt even higher.
There are things you could do to help deal with credit cards and debt.
Get ahold of your credit card company to try and get help regarding your specific situation
If you’re aware you will not be able to pay the minimum payment, you should let them know ahead of time.
This way they have a chance to work with you to find a solution without jumping to the worst possible outcome.
Sometimes they will create a payment plan or lower your APR to help you.
Most of the time they can at least push your payment date out so you have more time to come up with the money.
Some credit card companies will offer a hardship program that will not hurt your credit as much when eliminating debt you’re unable to pay.
There may be chances for you to change your budget and save more money
Sometimes failing to budget is the reason you can’t seem to make those minimum payments.
You could cut unnecessary expenses from your life, and if you qualify, seek out temporary government assistance.
You could qualify for food stamps, rental assistance, or temporary assistance for needy families.
All of these programs will help you to stop spending money in certain areas of your life and put it towards credit card debt or savings.
Choose a credit card with 0% intro APR
If you have not missed payments and you still have a good credit score, you could apply for a credit card with 0% APR.
You can then shift your credit card debt onto that card, helping you save time and money when trying to pay it down.
This may be a good idea as long as you’re still able to make the payments on the card.
Credit counseling and programs exist to help you manage your debt
If you have so much debt you can’t get out from beneath it, you could always find programs that offer credit card counseling which is usually non-profit.
The program helps you to get it together and reassess your budget with reduced payments and interest rates.
They will help you create a situation that looks at your debt and budget to come up with a long term solution.
Many will speak with creditors on your behalf to come to a resolution.
One population struggling the most with credit card debt right now are Millennials. Here are mistakes to avoid
As wages fail to keep up with the rate of inflation, millennials especially are finding themselves struggling to make ends meet.
There are several ways they can avoid making costly mistakes while trying to get by, according to the Associated Press.
First is to not spend the way you did before the pandemic hit.
When budgeting, assess your needs against your wants.
When it comes to needs, chances are the costs have already gone up since 2020.
If there are needs you could live without, it’s best to temporarily cut them out.
Another tip is to stop relying on your credit limit.
While the limit may look like it’s there to have, your creditor can lower it at their own discretion.
By creating a savings account, even if it’s small, you know that it won’t be taken away.
It’s best to not carry your credit card balance on a high interest credit card, because it makes what you paid more expensive.
The lower your interest rate, the more likely you are to keep your balance low.
Don’t miss payments or pay them late if you can help it, this is a major mistake.
You end up owing more money in the long run and it will ding your credit score.
Finally, if you don’t need a cash advance, do not get one.
The interest for cash advances starts immediately and usually fees are tied to getting them.
Personal loans are a better option.
When you do look for new credit cards, try to find ones with offers like the Amazon Prime Rewards Visa Signature Card
Some credit cards aren’t all bad if your credit is in good standing and you plan to use them responsibly.
The Amazon Prime Rewards Visa Signature Card is currently offering anyone approved a $200 Amazon gift card from now through July 29, 2022.
According to CNet, you can spend $300 on items through Amazon and then apply the $200 balance.
This will drop your total bill to $100.
The remaining balance will give you 5% cash back, or $5 in rewards for the future.
This makes your total $95 instead of $300.
There are usually bonuses for this card worth $100 or $150, which will probably be the amount after July 29.
Despite it being worth more right now, this Amazon credit card is one of very few that offer such a large welcome bonus that you don’t need to meet a spending limit to receive.
In addition to an Amazon credit card, Amazon offers the opportunity to use interest free financing for purchases.
For purchases worth $50, you can finance the amount for six months.
Purchases worth $250 or more can be financed for one year.
Purchases of $500 or more can be financed for 18 months.
There is no annual fee, but you must have a Prime membership.
Prime memberships are $139 annually and come with free one and two day shipping plus Prime Video.
The credit card, should you qualify, is immediately added to your Amazon account before you’re sent a physical card in the mail.
Samantha edits our personal finance and consumer news section. Have a question or lead? Send it to [email protected].