How to Stay Out of the Hole of Credit Card Debt

4 May

How to Stay Out of the Hole of Credit Card Debt

Credit cards are a convenient way to make purchases and dig ourselves into a hole that we cannot get out of. Learning how to use credit cards responsibly will save a lot of headaches and problem in the end. To begin with, do not use credit cards in everyday purchases. Yes, it does make things more convenient, but can lead you to a debt that you cannot afford. Using cash makes sure that you have the money and keeps you from falling into a hole of debt.

Another mistake often made by some, is making only the minimum payment necessary on the account. Over time, this leads to balances from interest and other purchases to accrue into a debt never expected. It is always wise to pay your bill in full or pay more than required.

For some reason, people get the idea that living on credit is ok. Well, it may be for the short term, but overtime the debt builds to an amount way above your head. Follow the rule that if cannot afford it, don’t buy it. The piece of plastic does not make it so you really are able to afford the item you want, it only makes it easier to get and put you in debt.

Many people have a tendency for splurging on their impulse to buy things they cannot afford, but to the credit card, they have. You should always give yourself the third degree, to why you need the item and of what use it will be. You need the ability to tell the difference between what you want and actually need when making this decision.

Some people don’t realize it, but their credit score is determined also by the amount of debt that you have. Cards with lower balances help to achieve a higher credit score. Generally, you should always have the aim of staying under 30% of your debt to credit. This will help balances stay low and increase your score over time.

If there comes a time, that you are unable to make a payment on time for any reason, you will end up with a late payment fee. Sometimes, calling to let them know that the payment will not be on time will help them to waive the fee. Overall, it is important to keep in mind the amount of serious debt you could encounter by irresponsible use of credit cards. Learn what behaviors you should adopt with using your card and this will help to keep you debt free.