Simple steps that you should take to avoid credit card debt trap
Credit cards are a great help to make payments when you have shortage of cash in your pocket or when you face any emergency situation. But, using credit cards every time to make payments will increase debt problems if you do not pay off the credit card balances on time. You can manage your debt problems if you make it a habit to use credit cards only when you face any emergency need.
Ways to avoid credit card debt
Read on to know 5 ways to avoid credit card debt.
1. Do not use too many credit cards – Credit cards help you to fulfill your emergency needs when you don’t have money with you. But using multiple credit cards at a time will increase your debts as you cannot keep a track of your outstanding balances on each credit card. As such, it becomes difficult to pay off your credit card debts.
2. Spend money according to repayment capacity – You should use your credit cards only according to your repayment capacity. This is important for the purchases that you make so that you can repay your credit cards outstanding balances as quickly as possible. If you spend more than your repayment capacity, you will fall into credit card debts. So, it is advisable that you should spend money according to your repayment capacity so that you can avoid falling into credit card debts.
3. Make full payments on time – It is very much important to pay off your outstanding credit card balances on time. If you do not make your payments on time, you can be charged high interest on your outstanding debts. Also, if you make minimum payment on your debts, it can affect your credit score. So, you should make it a practice to make full payments on your credit card debts on time.
4. Keep an emergency fund – It is always better to keep an emergency fund where you will save money every month apart from your daily expenses. This will help you meet any unexpected situation and when you save money in an emergency fund, you can use that money to pay off your credit card debts.
5. Read the terms and conditions of the credit card properly – You should read the terms and conditions of the credit card very carefully before using it. This includes the interest rates, transaction fees and the increased rates charged for credit, etc. This will help you avoid getting into increased debt on credit cards.
It is advisable that you should never give your credit card to anyone for using it even if they promise to return you back. You should control your credit card spending as this leads to tension and stress when credit card debt increases.
According to credit card debt settlement expert Charles Phelan, consumers who settle on their own get the best settlements. Phelan also says credit card companies would rather deal directly with a consumer, rather than go through a debt settlement firm
You're absolutely right Mel 🙂
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