Anybody with credit cards risks carrying a lot of credit card debt. Once you have accumulated too much debt on credit card, it might take years and a lot of sacrifices pay for it. As you use credit cards, you should keep these 5 ways in mind to avoid credit card debt:
Using credit card to pay for budgeted items may be a convenient and safe way to handle your money. You do not need to worry about losing money that cannot be replaced and you do need to experience the hassle of writing on a check. See to it that you pay off purchases you make at the end of the month. If you carry a balance, do not extend it out for more than 3 months. You should know when your grace period ends. If you pay your bill in full, you do not incur debts.
- Make Your Own Workable Budget
Knowing how much money that comes in and out is important when managing your finances. Workable budget is like a monetary crystal ball as you can find. Your budget will show you how much money available, when to expect to have more, when bills are due, and so on. It will also tell you how much money you’ve left over at the end of the month. Budget enables you to plan your purchases instead of reaching for plastic if you feel the impulse.
- Charge Durable Goods Only
The golden rule is not to use credit card to purchase items that will not exist by the time your bill arrives. You can use debit card or cash to pay for movie tickets, eating out, and gas. You can save your credit card for emergency situations. Once you use credit card for major expenses that you will not be able to pay off within the grace period, include repayment expense in your budget.
It is important to look at the conditions and terms of credit card offers always. Never assume that introductory interest rates are permanent. The offers that you get in mail could not be credit’s actual terms. In many cases, such offers are based on the best-case scenario. If you do not have a perfect credit, your terms might be different.
- Employ Cool-Down Strategy
Other people freeze their credit cards in blocks of ice, so they need to wait for the ice to melt before they can use the card. The idea is that if you need to wait for several hours before you could make a purchase immediate lust has time to pass. Then, you can calmly assess whether the product is worth putting your credit card. While freezing card could be a little extreme, you require some type of cool-down trigger. Try knowing your personality in terms of money. Others are more prone to impulse buying compared to others. If you are one of them, consider keeping your credit card in a secure and safe place once you go shopping so you aren’t tempted to use it.