When it comes to managing our finances, I like to think that I’m pretty clued up. I put a lot of time and effort into making sure our money is in the best place to ensure we earn the best interest rates. And whenever we need to spend money, I always do my research to make sure we’re getting the very best deal. But I know that not everyone gets as fired up about their money as I do. And I also know that not everyone has the benefit of having some cash saved up in case something breaks down or there’s an emergency expense. That’s one of the reasons why many of us own at least one credit card.

Do you really need a credit card?

It’s a sad fact that the average American has $38,000 in debt, excluding their mortgage. Unfortunately, debt can be a downward spiral, once you get into debt, it can be really tricky to get out of it. So you might wonder why on earth I’m suggesting that anyone get themselves a credit card.

There are a number of reasons why I think it’s important to have at least one credit card:

• Free borrowing – if you have a good credit rating and you pay your full balance off every month, then you can take advantage of 0% interest offers.
• Cheap money abroad – credit cards are a great way to get low commission, fee-free money when you’re travelling abroad, just do your research and make sure you choose the right one when you’re travelling.
• Consumer protection – if you pay for an item with a credit card and it doesn’t show up, then you will have the rights to a full refund.
• Safer than cash – if your wallet is stolen and it’s full of cash, then you’re unlikely to see that money again. The thief is unlikely to be able to use your credit card (just make sure you don’t keep your pin number written down).
• Low-interest options such as those offered by Wink Capital.

So, as long as you’re savvy with your money, and you pay your credit card bill off each month, then a credit card is a sensible thing to own. Just take some time to look for a good deal such as the low interest deals offered by Wink Capital.

What to do if you can’t pay your credit card bill

Hopefully, you’ll never find yourself in the situation where you’re unable to pay your credit card bill, but sadly it does happen for various reasons.

In order to keep your finances healthy, it’s always a good idea to build up an emergency fund, so that if you do find yourself in financial difficulty, you’ve got some money to fall back on.

If you don’t have a pot of cash in case of emergency, then there are a few things you can do to help get yourself out of a tricky situation.

Make extra money

Even if you already have a job, you can still make extra money on the side too. There are literally hundreds of things you can do in your spare time to make money, even if you don’t have any skills. I created a huge list of 101 side hustles, so take a look there if you’re struggling.

My current favourite ways to make money quickly are:

• Blogging
• Matched Betting
• Mystery Shopping
• Surveys – Prolific Academic is a really high paying survey site.

These are all things that I do all the time anyway, but even more so when we need some extra cash.

Prioritise your priority bills

If you owe money, then, of course, it’s really important to take steps to pay that back. But when you’re struggling to pay your bills, you need to prioritise certain things. You need to make sure you keep a roof over your head and food on the table, so those things need to come first.

These bills should always take priority over any loan or credit card debt:

• Rent/mortgage
• Council tax (where applicable)
• Utilities (gas/electricity/water)
• Food

Know your budget

There could be any number of reasons why you’ve ended up in financial difficulty, but not knowing your budget is a common one. It’s really important that you know exactly how much money you’ve got coming in, how much you need for bills, and how much you’ve got left over. If you don’t know those things, then you can’t possibly be managing your money.

Get help

If you’ve found yourself in the situation where your earnings just aren’t covering your outgoings, then you probably need to get some help. You can get free advice from debt charities who will help you without judgement and that’s a great place to start. Don’t ever pay anybody to help you get out of financial difficulty.

It’s also important that you keep your creditors in the loop. It might seem scary telling them that you’re struggling to pay your debts, but things will be far easier if you contact them yourself. Many credit card and loan companies such as Wink Capital will talk you through the options and help you to figure out the best way to clear your debts. It may be that they offer you a lower repayment for a short while, or they may discuss debt consolidation. Just be careful that you only agree to repay what you can afford.

Final Word

To sum up, it’s always a good idea to have a credit card, so long as you are sensible with your money and you opt for a low-interest card. Credit cards shouldn’t be used to pay for expensive luxuries that will take you years to pay off, that’s just a surefire way of getting yourself into big debt really quickly. But, a credit card that’s used sensibly and paid off in full each month, is a really sensible financial decision.

Do you have any strong feelings about credit cards? Perhaps you keep one in your wallet and wouldn’t have it any other way? Let me know your thoughts in the comments below.

*This is a collaborative post.