Do your organization skills leave much to be desired? Are your credit card bills scattered all over the place? Are you constantly tearing at your hair wondering when your next payment is due or if you just missed a payment?
You can relax a bit because here is tips that can help you better manage your credit cards.
Make a list
If you really want to do a better job of managing your finances the first thing you need to do is make a list of your credit cards. The easiest way to do this is by using a spreadsheet program like Excel or Google Sheets (which is free). You’ll want to have a column for the name of your credit cards and columns for their balances, minimum pavements, interest rates and due dates. This should take only a few minutes — even if you have to do it with a piece of paper and pencil.
There, that wasn’t so hard was it?
Be on time
If you’re trying to manage multiple credit cards it’s critical that you have that list you’ve made so that you can be sure to make your payments on time. Being late on a credit card payment or missing a payment altogether can have a seriously bad effect on your credit score. Only FICO, the credit scoring company used by the overwhelming majority of lenders, knows for sure how much a late payment will damage your credit score but it is believed that it will reduce it by around 50 points. Be late with two payments and your score could drop by as many as 100 points, which could drop you from having good credit down to poor credit.
Now that you know your credit card due dates you should set up reminders. Most of the credit card issuing companies will send you email or text alerts to help make sure you make your payments on time. But instead of relying on them you might want to create your own notification system by setting up reminders on your computer’s or smart phone’s calendar. Just open your calendar app, go to the date a few days before a payment is due, set up the event as something like “pay Visa,” and then make it reoccurring every month.
Use auto pay
Credit card issuers usually have an automatic pay feature that you could use to ensure you make your payments on time. In most cases you have the option of choosing the minimum payment, the full statement balance or some other amount. Of course, it’s best to pay the full balance every month, which would keep you from piling up debt. Alternately, your bank probably offers online banking where you could set up your payments. Many people prefer this because it allows them to keep control of their payments as on some months they might want to pay the full balance while on others they might choose to make only the minimum payment.
Have your due dates changed
If you have three, five or more credit cards you have three, five or more due dates. One trick for making sure you pay your credit card bills on time is to call the issuing companies and have your due dates changed so that they all fall on the same day. Most credit card issuers will do this if you just ask. You might pick a date that’s three or four days after you get paid. It’s also a good idea to make sure that one due date doesn’t fall too close to big payments such as your mortgage or rent.
If you want to make things really simple you could transfer the balances on those multiple credit cards to a new one – that offers a better interest rate. There are also a number of 0% interest balance transfer cards available. If you could qualify for one of these you should definitely transfer the balances on all of your credit cards to it. You would then have just one payment due date, which would really simplify the task of making your payment on time. Plus, you would have anywhere from six to 18 months interest-free so that all of your payments would go towards reducing your balance. If you could double or even triple up on your monthly payments you might actually be debt-free before your promotional period ends.
Optimize your rewards
If you’re managing multiple credit cards with multiple rewards you might find it hard to keep track of the rewards categories offered by each of them. Again you should create a spreadsheet to keep all the information in one place. On this spreadsheet you will want to list the name of each card and the rewards it offers. You could then save the spreadsheet to your phone via Google Drive, Evernote or Dropbox so you could check the rewards before you use a card or make a payment. Another neat trick is to set up your wallet to be successful. This means organizing your credit cards by how frequently you use them. As an example of this, you could keep the card used for everyday purchases in your wallet at the top and then leave at home that airline rewards card you use only when booking flights or that card that offers the poorest rewards.
Know when enough is enough
If you use the tips you’ve just read in this article you should be able to do a better job of managing multiple credit cards and without running into trouble. But it’s important to know when it’s time to know enough is enough. If you find yourself tempted to add another card because of the juicy rewards it offers but you feel you couldn’t do it without losing control just listen to your gut instincts. No matter how generous that rewards program might be or how big the sign up bonus, it’s not worth it if you would end up being saddled with more credit card debt or constantly hit with late fees.