Ways to Avoid Getting Into Credit Card Debt

 

It's pretty alarming to know that a large percentage of consumers these days are in serious debt trouble. And a more shocking revelation is that people who have debts do not realize why they've been there in the first place. That's why it pays to know how to avoid certain circumstances before you find yourself struggling to get out of debt. As they say, an ounce of prevention is better than a pound of cure. Here are 10 ways to avoid getting into debts using your credit card:

 

1. Maintain a reasonable balance.

 

If your income is not that high, try to stick with a credit balance that you can afford to pay in a month. Never accumulate high credit card balances even if you have a higher credit limit. You'll be in deep trouble if you focus more on your credit limit rather than on your income status.

 

2. Never pay the minimum amount only.

 

Do not try paying only the minimum amount required on your account. This may give way to accumulated interest charges and penalty rates. You may never realize how many purchases you make in a month if your focus on payment is the minimum amount only. Never ever try doing this because it can be a hard habit to break.  A good idea would be to pay the minimum PLUS the amount of new charges for the month.

 

3. Avoid having too many credit cards.

 

The reason is definitely clear. The more credit cards you have, the more chances you'll make unnecessary purchases. If you have at least 3-5 credit cards in your wallet, chances are all of them will have bill statements at the end of the month. The probability of missing a payment in any of the cards is higher especially if you don't plan your finances wisely.

 

4. Never pay credit with credit.

 

As much as possible, avoid getting new credit cards and use cash advances to pay some of your outstanding balances on your other credit cards. You'll never be able to track your cash flow and may result in accumulated debts without even realizing it.

 

5. Never take your credit limit to the max.

 

Credit limit, as its name suggest, limits your purchasing ability. However, it doesn't mean that you should shop 'til you drop. It would be better to set a credit limit on your own, one that is dependent on your income.

 

6. Do not use credit cards to buy the basic necessities.

 

A good budget is the key to sound money management. This means that you list down the basic supplies that you need to purchase in a month relative to your monthly income. Your credit purchases should be for convenience only and not because you