Are you Single Mom? Avoid Your Credit Cards from These 3 Things!
The use of a credit card as needed can be recommended for single parents, because it can help meet the needs and pay off monthly bills, such as electricity, telephone, cable tv, and so forth. Credit cards will be a tool to monitor all spending money because all transactions that use credit cards must be recorded automatically.
But in reality, oftentimes people consider credit cards as a substitute for cash in the wallet. They feel lazy to bring money for shopping despite the fact that there is a small amount of cash in their wallets, so credit cards function more as bailouts.
Great care is needed in utilizing credit cards to avoid the endless state of debt, do not let the monthly salary run out to pay the interest-bearing debt. There are some important points that you must pay attention to in using this credit card. Here is the description:
Types of Transactions to Avoid
It is best to choose which transactions can be paid off my credit card and which ones should be avoided. Transactions with very large value but only repaid with minimum payments will become an endless debt trap. This is called the snowball effect, which is when using the minimum payment, half of the payment interests, and this is what then makes credit card debt continues to accumulate.
There are several transactions that do not need to use a credit card, because it will take a long time to pay off the bill. When it takes a long time to pay off the bill, the customer must eventually pay more interest. Here are 3 transactions that do not need to use a credit card for payment:
Hospital Bills, Because Usually the Nominal Big
The bill for medical expenses in the hospital is definitely expensive, you should not use a credit card to pay it off, because it will only make the loan interest higher and increase the number of bills with large interest. Credit card interest rates range from 10% to 30%.
Sometimes credit cards are an easy solution when you need emergency funds, such as Mom or children are hospitalized and must be hospitalized. But paying hospital bills using a credit card is not a wise move. Hospital bills must be very large, so it is feared that it will exceed the credit card limit and can make routine bills that are normally paid using a credit card to be delayed.
Unless you are trapped and cannot find a loan from a friend or relative, please use a credit card. After that, immediately calculate the total debt bills, then immediately find a friend or relative’s loan and pay off the bill. Even better if you have health insurance, with monthly payments via credit card.
Education Costs Should Have Been Well Planned
The cost of school education for children is getting more and more expensive, so avoid using a credit card to pay off tuition fees. It is better to plan education funding early on by choosing an appropriate instrument for future children’s education costs, such as education insurance, education savings, and investment. Or if trapped can use the option to take a KTA loan as long as the amount does not exceed 30% of total income so as not to interfere financially with the family.
If you choose the education savings option, then with a credit card mom can realize the desire to have electronic goods while still saving for children’s education. Like: buying a refrigerator with 0% installments using a credit card. For example: paying refrigerator installments of USD 500 thousand per month and education savings of USD 500 thousand per month, so that expenses become USD 1 million, but getting a new refrigerator and children’s education savings goes on.
Currently, credit card transactions can also be used to pay tuition fees. But tuition bills will be burdensome if paid with a credit card, even though the interest rate for student loans is lower than the average credit card interest rate. Large payments will make the repayment time longer and higher loan interest. It is better not to add the burden of debt from the payment of student loans, because it will create more debt and longer payments. The best solution is to find a scholarship.
Marriage Costs, Adjust to Your Ability and Don’t Owe
If you have the desire to release the status of a single parent which means you want to remarry, you should prepare savings for wedding expenses, never use a credit card to pay off all wedding expenses. If to help a little unexpected expenditure is still possible. For example, an estimated total wedding cost of USD 40 million, do not all use a credit card.
Because it is not a wise step when starting a new household life after all this time being a single parent with accumulated credit card debt. Of course, this will burden new household life, even this condition can be the beginning of a dispute with her husband. Because after officially becoming a new family, of course, the husband will share in paying off the mounting credit card debt.
Unless a credit card is used for unexpected purposes whose debt value can still be repaid at maturity, without having to burden the husband’s burden, such as: buying your uniforms, paying floral decorations, and so on. Most importantly do not use a credit card to meet all wedding expenses
To realize a marriage that fits your dreams does require a lot of costs. But starting a new household life with a number of bills, certainly not something good. Marriage to foster a new and happier household, so leave the pride. It’s best to celebrate a wedding in a simple way, it doesn’t need to be too fancy.