Making smart decisions about using credit cards is of utmost importance when it is vital to avoid credit card debt. A credit card is a highly convenient tool that can be used in order to buy things without using cash. But if a credit card user misuses these convenient financial tools, they soon become nasty little debt generators. Credit card debt is already a big disaster that is taking control over all Americans, especially the young adults and the senior generation. In order to use your credit card in a smart manner, you will have to do some rethinking about your spending habits.
Are you aware of the things that you have to pay with your credit card? Remember that everything shouldn’t be bought with credit cards as this is the main reason behind accumulating debt by the users. Analyzing expenditure and coming up with a plan will always help you benefit from credit cards without accumulating debt. The concerns of this article will deal with the ways in which you can use credit cards without accumulating debt. If you wish to be a smart credit card user, here are some tips that you may follow.
Some potentials signs of credit card debt
Certain hints will always help you out when the situation is becoming uncontrollable. Once you get into credit card debt, you will go through different kind of difficulties in making the full payment. Some of the earliest warning signs of credit card debt include charging more than what you pay, ignoring credit card statements, balance transfers to avert payments, the lack of a fixed payoff plan and the use of credit card for the purchase of very expensive or basic items. All these signals are of credit card debt disaster. An intervention will be necessary, especially when several of these signs occur at the same time.
Tips for using your credit cards wisely
If you wish to control your debt in a systematic manner, you should be a smart user. Here are some tips that come from experts on how to be a smart card user.
Rein in impulsive shopping: There are many people who fall in debt simply because they can’t resist themselves from a purchase which could have been resisted. According to the stereotype, women are the ones who are usually incapable of going without another bag or a pair of shoes. Yet, there are innumerable men who fall victim to impulsive shopping as well. If you wish to stop this, you should leave your credit card at home, when you go out for shopping or even for a walk. Take some cash with you as this will be sufficient for a coffee, a cab home or any other small expenditure.
Pay off your balance every month: The secret to being a smart credit card user is paying off your balance every single month. Who wants to rack up debt due to misusing their credit cards? Once you get your monthly statement, you should always pay off your balance in full every month as carrying balance from one month to another comes with penalties, fees and other extra charges. Keep track of your mails so that you don’t miss a single payment and rack up debt.
Prioritize your payments: Not all bills have the same importance in your financial diary. You are the one who will decide which payments are the most urgent. Suppose you have four credit cards and you can’t afford to pay off the balance all at once. Rather than dividing your funds equally among the four, pay down the card with the highest interest rate while paying the minimum monthly payment on the other 3 cards. Funnel the rest of the money into the next card until all of them are paid off.
Read the fine print: This is one of the most overlooked options when it comes to avoiding credit card debt. Did you know that there are so many people who are in debt simply because they forgot to read the fine print or they misunderstood the contents of the fine print? Well, the fine print of any card is the main portion where every single information about the card is given, which even the card issuers won’t tell you. Hence, if you miss this information, you may be later on subject to a sudden hike in interest rates without prior notice. To avoid these, always read the fine print of the credit cards.
Although there are debt consolidation loans and companies that can help you get out of debt in the near future, yet it is always better to stay safe than sorry. Moreover debt also has a pretty bad impact on your credit score and on your financial records.