5 Credit Card Tips that will Help Consumers Avoid Excessive Debt

Posted by on Oct 3, 2013 in Credit Card Tips | 0 comments

While credit cards can be a great way to prepare for emergencies and spread out the cost of big purchases over a longer period of time, excessive debt can be a real problem for consumers with credit cards. These credit card tips will help you avoid excessive debt.

Create a Budget

The easiest way to avoid getting overwhelmed by excessive debt is to create a strict budget and stick to it at all times. If you cannot afford to purchase a large item and incorporate monthly credit card payments into your budget, then you should not purchase the item. A budget is a guidebook to financial security. With a budget, you can see precisely where your money is going, and you can avoid accumulating too much debt.

Never Use Credit Cards to Pay Recurring Bills

One thing to avoid with credit cards is using a credit card to pay recurring bills. If you use a credit card one month to pay a monthly bill such as your electric bill, gas bill, or rent payment, you’ll have to pay that same monthly payment next month in addition to a minimum credit card payment. The credit card tip here; credit cards should be reserved for special monthly purchases that fit within your budget.

Make More than the Minimum Payment

If you can, try to make more than the minimum payment each month on your credit card. Paying more than the minimum will chip away at your credit card debt and help you pay off the credit card more quickly. Even a few extra dollars each month can go a long way in reducing total debt. It will also significantly reduce the chances of surcharges such as late payment fees and penalties.

Save for as Much as Possible

While it’s tempting to use a credit card to purchase items right away, you should try to save for them as much as possible. If you plan on purchasing new appliances, new electronic equipment, or even a new car, saving for the total cost is preferable to racking up excessive credit card debt.

Credit Card Tips #5 – Avoid Late Payments

One simple way to avoid excessive amounts of debt is simply to make payments on time. Late payments add late charges to your account balance, and these charges are added to the principal amount of your debt. This means that late fees will accrue interest just like the regular amount charged to your credit card. If at all possible, make payments on time. You can set up recurring debit payments or direct bank account withdrawals to ensure that you never miss a payment.

Conclusion

Credit cards are only dangerous when used irresponsibly. With these credit card tips you can steer clear or any major credit card debt, and instead enjoy the benefits.

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