Credit cards give you a lot of convenience. You can use a credit card to repay electronic equipment, pay for food delivered directly to your home, and fulfill your hobbies. In addition, you can also use a credit card to shop online. The ease of using a credit card makes someone sometimes not aware that they are in a credit card debt. Here are eight ways to avoid credit card debt:
Have an Emergency Fund
An emergency fund is money that you can set aside regularly every month for things that aren’t unexpected. These funds can be used for example repairing cars, paying medical bills, or other emergency situations. The emergency fund can also be used if you are retired later. You also have to prepare special funds for unexpected events accompanied by careful preparation. With careful preparation, this savings fund can help if you lose your job later so you don’t need to owe the bank. Separate your reserve funds into one account that you can easily access. Find a special savings account that can also benefit you such as providing high interest rates for savings and more.
Buying items according to ability
Avoid mistakes using credit cards by buying items that are not in accordance with your financial capabilities. You can avoid getting caught up in credit card debt by buying items that match your income. If you cannot pay for an item in cash, chances are that you cannot pay it. Make a credit card limit list that you have and control your credit card usage according to your income.
Don’t Forget to Pay Credit Card Bills
Note the date of your credit card payment. Delaying or forgetting to pay a credit card bill can get you wrapped up in a bill that can swell. Once you forget to pay your bills, your bills for next month will be even more added with late fees and ongoing interest. This will be more difficult to handle because you have to provide additional money to pay the interest and penalties. Not only are penalties and interest burdensome, forgetting to pay bills also has the potential to cause your name to be bad at the Historical IDI.
Pay Full Bill Every Month
If you want to avoid credit card debt, one way is to pay the full bill every month. Don’t accumulate credit card bills by paying only with a minimum payment . In this way, you can avoid getting caught in credit card debt. You don’t need to worry about fines and interest that might ensnare you because you have already paid the full bill. This means you must try to use a credit card according to your financial capabilities.
Know the Signs of Credit Card Debt
Many people are caught in credit card debt because they are not aware of the financial habits that they do are the cause. If you are aware of the initial signs, you can avoid credit card debt. For example, when you are unable to pay the full bill every month, you need to be aware of the debt that accumulates in the following month. In addition, daily needs such as food, clothes or fuel must be paid for with cash that you have not with a credit card. Another case is when you don’t pay one credit card bill. Furthermore, you must start being alert to being trapped in credit card debt when you pay more than the price you bought because of an additional interest. Also keep in mind not to use credit cards to buy expensive items that are not in accordance with your financial capabilities.
Don’t Make Cash Withdrawals with a Credit Card
Use your credit card wisely and according to ability. One of the worst things you can do with your credit card is to take cash with a credit card or commonly called the practice of cash withdrawal. If you withdraw cash with a credit card, you can get financial problems. Use only debit cards to withdraw money because the money on a debit card is your money and not a loan as if you withdraw money from a credit card. Withdrawing money from a credit card can be your first step in getting into credit card debt. Immediately make financial planning carefully and have a reserve fund so you don’t need to add debt by withdrawing money from a credit card.
Understand Credit Card Terms and Conditions
Before you have a credit card, find out first the terms and conditions provided by the credit card provider bank. Understand the penalties and interest applied to your account. Furthermore, you also need to understand when the interest and penalties apply. This will alert you and pay off debts before interest accrues and is subject to fines. The interest and penalties that are there will make you more wise in using a credit card because you already understand what you are paying for not only what you buy but also the interest and penalties.
Limit Credit Card Amount
The number of credit cards that you have can also affect your bill. The more credit cards you have, the more debt you have to pay. If you begin to have difficulty managing and controlling the use of credit cards, you must have begun to be vigilant. Having too many credit cards can affect the financial strength you have. You must be diligent to always check the credit cards that you have such as payment deadlines , credit card interest, fines, and bills that you pay.
Credit cards do not merely plunge you into debt because of the many benefits that can be obtained. However, keep in mind to always use credit cards wisely and control your finances. The following article from us, How to pay off a credit card so you can be free from debt.