Many of us will have a credit card. They are very useful and can allow us to feel more confident when buying online and be more convenient to use in shops. We may also like the fact that we can delay having to pay for the items that we buy with it. However, some people will always pay off their credit card in full and others will not. We may wonder which is best.

Cost

There is a cost with keeping an outstanding balance on a credit card. If we do not pay off everything we owe each month then we will be charged interest. This interest may not look very much, but it is good to think about how much this will add up if we do not pay it back over a long time period and whether we think that this is worth it. It is good to think about the other things that we could buy with this money and whether we are happy with paying this out for the credit card or not. Costs differ between different credit cards and you should bear this in mind as well, especially if you are choosing a new one.  

Convenience

It can be really convenient to borrow money on a credit card compared to other loans. Other loans might be cheaper but you will have to apply for them and wait and see if you get approved. If you have a credit card, then it is there ready to use, so it is much easier. This is why some people choose to use it over a cheaper loan. It should not take that long to apply for a different type of loan though and if you can save a significant amount of money it is worth thinking about doing this. It may even be worth considering using a cheaper loan to repay the credit card. This can be a risk though, as if you are tempted to spend more money on the credit card and not repay it, you could end up with two loans to repay, rather than just the one.

Budgeting is a key way ensure you always make your repayments.

Finding the Money

If you do decide to repay the credit card then you will need to find the money to do this. It is worth noting, that you can pay off chunks of money without having to clear the whole balance or just repay the minimum and you can do this at any time, not just when you have just been sent a statement. Of course, you will need to find the money to be able to do this. It is a good idea to think about how you will find this. It might be that you have the money in a savings account and can pay it off with this, however, chances are that if you had this money you would not have the outstanding debt in the first place. You may therefore need to cut back what you are spending, perhaps by trying to see if you can pay less for what you are buying or by buying less things. Alternatively, there might be a way that you could make or earn money somehow. There are lots of things that you can try. 

It can also be a good idea to stop using the card until it is paid off. Once it has been paid off then it might be wise to set up a direct debit to pay the full balance off each month so that you will not have any outstanding debt and therefore no longer have to pay charges on it. You will need to make sure though, that you are careful with how much you spend so that you know that you will be able to afford that repayment when it is due to be made.

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