Budgeting With Credit Cards
These days, with so much easy credit available it is very easy
to let your finances and debts get a little out of hand. Pretty
much every morning when you wake up and check your mail, you
will be greeted by a plethora of junk mail advertisements
seeking to entice you into signing up for a personal loan, a new
credit card, a debt consolidation loan or some other similar
form of credit. Then on the television the same ads will be
targeted at you all day long. When you check your email they
will be there, filling up your inbox, and pretty much every high
street store you enter will be offering you their own store
card.
Budgeting, and keeping all of these various expenses under
control just gets more and more difficult with the more options
there are available and the more things you have to keep track
of. However, simple household budgeting is still a good option
for anyone who wants to keep their debts under control. The
basic principle of budgeting is that your expenditure matches
your income. It does not necessarily mean that you spend less
money and make a lot of cutbacks in your lifestyle, although
this is frequently what it entails.
Budgeting is more concerned with giving you the control you need
to keep track of your expenses. There are a couple of ways in
which you can make a budget and stick to it if you have credit
cards. Credit cards give you a number of payment options for
your convenience. You can set up a direct debit between your
credit card company and your bank and inform them either to pay
off the full amount on your statement each month, pay off the
minimum amount on the statement each month, or pay a fixed
amount against your credit card each month.
Paying the fixed amount is a very convenient way of budgeting,
as you will know exactly how much each month will go to your
credit cards. You simply select a sum that you can afford each
month and have the bank transfer that against your credit cards.
The only downfall of this method is that there is no guarantee
that you will spend less than the amount you repay each month.
So for example, if you are paying two hundred pounds against
your card each month, but spending more than this, you will be
building up a large credit card debt for yourself that you will
have to repay at some stage in the future.