No one wants to get into credit card debt. But it happens unintentionally and quickly. Some of the common expenses like unexpected healthcare bills, emergency expenses, and everyday spending can add up so fast. Carrying too much balance on your credit card comes with several financial risks such as hundreds of dollars on interest, tardy financial goals, and damage to credit scores, etc. However, you can avoid credit card debt by maintaining wise spending habits, making payments on time, and following the terms issued by the credit card issuer.
Here are some strategies you can adopt right now to avoid getting into credit card debt and maintain strong spending habits.
Swipe Only for What You Can Afford
Access to quick credit allures to buy stuff that you really cannot afford due to your lower monthly incomes. Sometimes you might justify that you can pay it easily later on, but you cannot. Doing so can get you into a huge credit card debt that results in hundreds of dollars on interest. This is the reason, you should swipe your card only for what you can afford and pay off quickly without getting late. This will keep you from hefty financial charges and interest. Use your credit card for things you can repay right away at the end of the month.
Transfer your Balance
If you are carrying a balance on your existing credit card with high interest rate, then performing a balance transfer transaction can be a smart move. When you transfer your balance from high interest credit card to a credit card with 0% APR, you can easily repay your debt without paying thousands of extra dollars on interest. This allows you to consolidate, manage and repay credit card debt more efficiently. However, not paying the balance of your new card can backfire and build more debt instead of eliminating the existing ones. Read all the terms & conditions carefully and make on-time payments to get out of debt on better terms.
Always Make Payments on Time
Sticking to your credit card monthly payments is one of the best ways to prevent building debt on your credit card. When you miss a single payment, the next payment due will be much higher with interest as well. As a result, it gets harder to get back to normal. This puts strain on your financial situation and keeps you from meeting your financial objectives. Make a habit to pay your credit card balance in full every month. You can also set payment reminders or direct deposits to avoid late or missed payments.
Don’t Lend Out Your Credit Card
You are the only person who is responsible for all the transactions made and charges made to your card. Lending your card to someone else puts control of your card balance with another one. If they swipe your card for huge payments and refuse to pay on time, it can cause credit card debt and a danger to your credit scores as well. So don’t lend your credit card to anyone and get authorized credit cards for your family or employees if needed.
Understand Your Credit Card Terms Issued by the Card Issuer
Credit card agreement that you sign spells out everything you should be aware of about the use of the credit card. This may include how interest will be charged, what is your credit limit, the fees you will be charged after reaching your limit, perks and rewards you can avail and payment terms. Understanding all these things helps you use your card responsibly and avoid building credit card debt. So, always read the fine print carefully and understand what you can do with your credit card to earn and save money while avoiding building debt with that.
Chances of getting into debt usually depend on several factors and most of them are preventable. Maintain strong pending habits, make payments on time and pay for only what you can afford to make your credit card work for you.