Credit cards are important to every household. They give you flexibility to buy stuff when you don’t have cash and you can rely on them during emergencies.
However, credit cards are among the leading causes of heavy debt for most people. This could be due to
- Failure to understand that credit cards do not equal extra money or income.
- Lack of discipline. Just because you have a credit card, it doesn’t mean you have to use it.
If you lack discipline or don’t understand your credit card debt, it is likely that your card balance is almost exhausted. It is also likely that you have been failing to make monthly payments and as such, have been accumulating lots of interest and charges.
Below are some proper credit card use practices that you should stick to if you want to avoid falling into heavy debt:
Only Charge what you can Pay Back
If you want to enjoy the benefits of having a credit card, but you want to avoid debt, only charge an amount that you can afford to pay on each billing day.
If you realize that you are about to spend more on your credit card, only buy items that are a priority and leave out any other items that you don’t need.
Ensure that you plan for an amount in your income each month to pay your credit card bills.
Do not extend Payment in the Long Term
Do not allow your credit card balance to roll over for too many months. If you are going to make a large purchase, estimate the number of months it will take to repay the balance and only buy on credit if you can pay in the shortest possible time.
The more months you take to repay, the more you will spend in interest.
Avoid Large Credit Limits
It takes very little effort to rack up credit card debts, especially when your limit keeps getting bigger. With time, your issuer will increase your limit and this will make it easy for you to buy expensive items. Big amounts attract more interest and this will make your debt larger and more difficult to pay.
Avoid the temptation of too much credit. Talk to your issuer to see if you can maintain your credit card balance at a low amount
Spend Only a Small Percentage of your Limit
Do not owe more than thirty five percent of your credit card limit. Be constantly vigilant so that as you near the 20% spending point, you can start to hold back on purchases.
Get help from a Debt Relief Company
Should you find yourself with too much debt and you cannot pay back, ask for help from a debt relief company. This will prevent you from incurring more debt and getting into a situation that will leave you financially stranded.
The debt relief company will also train you on some self-help debt relief practices that will help you to never get back into debt.