Controlling debt.

2min read
Posted 10 April 22

Responsible credit card usage comes with its rewards. Spending money wisely on your card shows credit providers you're good with repayments and gets you approved for more credit, lower interest rates and better lending deals in future. 

Withdrawing money.

Most cards will have a credit limit, which prevents you from advancing (or borrowing) a lot of money in one go. Your previous behaviour and credit score determine the limit you're allowed. 

So if you want to get trusted with more credit, you have to improve both these factors. But remember — no matter how high your score, they'll always be a limit to what you can borrow, and it'll just be a lot smaller when you start.


Existing credit debt.

If you already have existing credit debt on your card, you need to talk to your provider about managing a new payment plan if you suddenly find you can't meet repayments. Otherwise, late or penalty fees will be applied to your loan and defaults after the first few missed repayments. 

Making a budget.

The best place to start with your credit debt is to work out a new spending habit. A good rule of thumb in budgeting is to figure out a spending plan, like the 50-20-20 rule; 50% on necessities, 20% on savings and 20% on something fun. 

You can come up with an exact figure by working out your income minus expenses, which make up your version of the 50-20-20 rule. You'll want to repay what you owe before adding on new expenses if you're already in debt.


Stop! Disclaimer!

Info and tools on the Yonda website are to be used as a guide only and do not constitute financial advice. Use Yonda as a starting point and then seek professional advice.