Credit card debt can be one of the worst debts to have because of the high interest rates charged on credit card purchases. Also, credit card debt does not in any way increase you net worth in the way that having equity in a home or a car does. However, every day people make purchases on their credit cards because they cant afford to pay for them with cash. Avoiding credit card debt is easy. Read this article for tips on managing your credit cards in order to avoid credit card debt:
Use Emergency Credit Cards for Emergencies Only
There are two main purposes for credit cards: to build credit and in the case of an emergency. If you have an emergency credit card, keep it at home. Dont carry it with you in your wallet where youll be tempted to use it to buy that thing you want but dont really need. If you wouldnt take out a loan to buy a new pair of tennis shoes, dont put them on your credit card. The principal is the same.
Buy Only What You Would With Cash
A good way to establish credit with a credit card is to use it to buy things that you would normally pay cash for. Youll but gas every week whether you have a credit card or not, so, instead of paying cash for it, use your credit card. Then, at the end of the month, use the cash you would have spent to pay down the balance of your card. This is an excellent way to build credit without making unnecessary purchases.
Pay Your Bills on Time and Dont Exceed Credit Limits
The fastest way to accumulate debt on your credit cards is to pay your bills late or exceed your credit limit. Your lender will charge you late or over-limit fees, and these add up quickly. To avoid exceeding your credit limit, keep track of credit card purchases just as you keep track of your checking account balance. Pay your bills on time either by signing up for automatic bill pay, or by listing monthly reminders on your calendar. |
