Credit cards : how to optimize your budget ?
Your wallet is full of credit cards and makes your finances uncomfortable ? Let’s discover our tips to optimize your budget and refind a healthy economic situation !
How did we get to the excessive accumulation of credit cards?
The credit cards land sometimes too easily in your wallet. It’s easy to understand trough the next example : you go shopping and the store offers to subscribe to a credit card. The card is attractive because it gives access to an interesting discount on your purchase. It’s how a new credit card can be found slipped into your wallet !
There are also situations that generate the need to own a credit card, like online shopping or international travels. Credits cards are in theses cases necessary to pay.
Payment on credit : is it attractive for the consumer?
What is the benefit for a large-sign to offer a credit payment ? Is it actually a favour to grant a discount if you purchase on credit ? Do you know the impact of credit payment on your budget?
Credit cards always generate exorbitant costs, particularly in comparison with the private credit. Finally, the discount offered by credit purchase is completely involved by the charges of the credit card.Be careful with the discounts offered in case of credit payment. These discounts cause an instability in your budget!
The monthly repayments of a credit card
Each credit card issuer sets its own terms and conditions, in which the conditions of the montlhy repayments are established. Generally it’s required to pay a minimum amount per month for a credit card.
When the cards accumulate, the minimum settlement of monthly payments may be heavy for the budget of the consumer ! For example : you have a card A with a credit of 5000.- CHF and a card B with a credit of 3000.- CHF. If you need to pay a monthly repayment of 10 % for each card, you then pay 800.- CHF every month for your credit cards. And this monthly amount does not include the interest, the annual fees or the financing costs..
To maintain your budget and decrease you monthly repayments, it’s possible to regroup your credits. What is this operation and how does this impactyour budget?
Let’s consider a concrete example : Mr. Müller asks our financial partner Multicrédit for a credit. Multicrédit notes that Mr. Müller has already several credit cards, a private loan and a leasing. Multicrédit suggests then a debt consolidation loan to Mr. Müller.
The debt consolidation loan contains the credit cards balances, the private loan and the leasing.That enables M. Müller to sell out his credits ! However even credit cards are cleared, they are not cancelled.
The debt consolidation allows a more stable financial situation, reduces the monthly repayments and reduces credit costs. If you accumulate different credits, it can be interesting to opt for a debt consolidation. Multicrédit stands ready to help you!