Credit Card Debt: How To Avoid The Cycle of Debt

Credit Card Debt: How To Avoid The Cycle of Debt

The numbers of people who are facing mounting credit card debts are on the rise. While it’s true that credit cards have numerous benefits, it can cause one’s financial situation to spiral out of control quickly if he or she is not able to use credit cards responsibly. Because credit card companies make it so appealing to enroll for a card via perks, bonuses, zero interest purchases and special privileges, more and more people are using credit cards much more than debit cards.

Multiple purchases lead to accumulated debts and with high interests, one can expect to pay more than he or she should. Skipping a single payment and you end up with a shocking monthly bill. In this article, we will discuss several ways to avoid getting trapped under multiple financial obligations brought on by credit cards.

Pay in Full, Pay On Time

Nothing beats paying your credit card bill on time and in full to quickly get rid of accumulating interest on past purchases. On the other hand, if you do not have sufficient funds to pay off your credit card bills in full, make it a point to pay above the minimum payment requirement. By lowering your outstanding balance, you improve your own credit score.

Read The Fine Print!

It’s important to read everything you need to know before you apply for credit cards. Check the interest rates, grace periods, and the fees and charges that come with using the card. Stay away from credit cards that require annual fees. In addition, interest rates can be negotiated so it’s best to inquire about this when you talk with your would-be creditor.

Check Your Monthly Statement

In some cases, credit card companies will increase without prior notice and for no apparent reason. To make sure you are updated all changes, check your monthly statement religiously. Even if you paid in full, you should always check for changes in the interest rates.

No to Cash Advance

No matter how tempting it might be, avoid taking out cash advance offered by your credit card company at all cost. Cash advance have higher interest rate with no grace periods, something that most cardholders are not aware of.

Avoid Using Your Card For Everyday Purchases

It’s best to use cash instead of credit cards for everyday purchases like groceries, fuel, watching a movie, etc. Using credit card can become quite addicting if you use it every chance you get so if you have the funds, always use cash.

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