3 Real World Solutions to Avoid Credit Card Debt
Credit card debt is not something that we are forced to live with. The vast majority of people are under the impression that credit cards are an absolute necessity to survive in today’s world. Nothing could be further from the truth. The truth is you can enjoy the best of both worlds. You can live rather easily with a credit card and it’s benefits and still have no credit card debt. The key is to make some easy, real world changes. Here are three to get you started on the right path:
Change Your Perceptions
If you regularly live above your means, you are inevitably going to build credit card debt. Credit cards are not meant to help you buy things you normally can’t afford. A credit card should be used to prevent you from having to carry cash and to make purchases online. First, you have to get your mindset straight. Don’t use credit cards to finance purchases you can’t buy outright. This is a losing proposition and a bank loan is a much more logical choice. The interest rates on credit cards are designed to compound over time.
Live below your means and use credit cards for their intended purpose. Credit card debt piles up fast and the interest can bury you financially. Don’t fall in this trap. It’s hard to get out of. It’s all about discipline. If you know you can’t control your spending when you own a credit card, then don’t own one.
Pay Your Balance in Full Every Month
As you use your credit card through the month, keep in mind that the bill is coming due. Stay within your budget and never look at it like a flexible entity. Too many people set up a budget and then treat it as though it is rubber….stretchable when necessary. Set a budget and stay within it. If you do this, you can pay off that credit card debt in full at the end of the month. This gets you all the benefits of having a credit card. You get the revolving credit benefits for your credit report. You get the flexibility of not having to carry cash. You get the rewards without interest in most cases.
Don’t Get Pulled in By Rewards Without Investigating
Rewards programs are common these days and they can be as tricky as a scam. Some of them are designed to make you overspend and some are designed to get you paying interest. If you overspend, then interest and credit card debt naturally follow. What good is cash back if they are taking more than that in interest to give it to you?
Pull up the information on the rewards programs and investigate them. Talk at length with people that will understand the terms and conditions. Ask questions and make sure you fully understand the program. Once you feel good about the terms, you can then take full advantage of the program. Only use it if it fits in with your spending and payment patterns. Never adjust your budget or spending to fit a rewards program. It will end in more credit card debt. Rewards can be a good thing but not if you have to pay for them in the end.