The holidays are prime shopping time, which often means increased credit card bills. If you use credit cards, going into debt can happen before you know it, but it doesn’t have to be this way. There are several ways to avoid debt and sensible ways to get out – and stay out.
Never Miss a Payment
Before you know it, one missed credit card payment becomes five to six missed payments. Never miss a payment, even if you can only pay the minimum due. Try to pay more whenever you can. Avoid transferring money from one card to another, unless it will save money (such as for lower interest rates). The best solution: Pay the balance in full each month.
Right now, remove the phrase “charge it” from your vocabulary. Most people in debt got there because they charged items they could not afford. No matter how tempting an item is, ask yourself if you need it. If you do, can you wait until the price lowers or you get a better deal on another product? How soon can you pay off what you charge? If you don’t like your answers, pass on the item.
Know How Credit Cards Work
Many credit card users aren’t sure what fees are applied to their accounts and when. They struggle to understand how interest rates work, how to keep track of credit scores, and how to ensure they’re paying minimum balances. Talk to a banker or other financial adviser to ensure you understand basic credit card terms.
Limit Your Cards
The more credit cards you have, the more chances you have to get into debt. It’s best not to carry credit cards, but if you must, limit yourself to one or two.