By Carlton Ryan
Credit card debt has ruined many lives. Falling too far behind on what you owe to a credit card company can lead to bankruptcy and financial destitution. Whether you’re trying to recover from mistakes you’ve already made with credit cards, or are a first time card holder worried you might fall into debt, learning how to avoid the dangers of credit card debt is crucial. Here are four tips for doing so.
- Limit your spending. Credit card companies will allow you to spend as much as you want, which may make you feel as if you have unlimited funds. Just remember, this feeling is a trick: you still have to pay out of your own pocket for whatever you buy. Only purchase what you can afford. Keep a budget so you will know how much you’ve spent, and don’t let yourself indulge on things you don’t really need.
- Pay your bill on time. As soon as you miss your credit card bill’s due date, interest will start accruing. Costly late fees will probably be incurred as well. You should make it a personal rule to never miss the bill date, except in cases of emergency. Take note of when the money is due and make sure, as the day approaches, that you are prepared to make payment.
- Pay off your balance in full. In addition to paying on time each month, you should also pay off the entire balance due. Spend only what you know you will able to pay off when the month ends. Make use of the budget you should be keeping. Don’t let yourself off the hook with excuses about how letting the bill slide for a month won’t matter — decisions like that are how people get into trouble with credit cards.
- Get a card with a low interest rate. You should do all you can to avoid paying your bills late, but on occasion circumstances may force you to go temporarily into debt. Owning a card with a high interest rate could put you into serious danger in such times. A card that offers a better interest rate means you will lose only a little extra for having paid late.
Millions of people have made their lives worse by allowing credit card debt to overwhelm them. Nonetheless, if used properly, credit cards are a helpful, valuable convenience that will make your financial affairs run more smoothly. Be careful and self-disciplined and you’ll enjoy the advantages of having a credit card, without the potentially ruinous downside.
