Credit card debt is a nightmare for many people. Out of control spending is difficult to repay, especially if you are just making the minimum monthly payment. It can lead to stress within families, particularly marital stress. Excessive debt, including money owed on credit cards, can damage your credit score and possibly lead to bankruptcy. Here are some strategies for avoiding credit card debt.
Tips to Avoid Credit Card Debt
- Establish a budget and stick to it. This helps avoid impulse buying and purchasing things you cannot afford. Charge only the things that fit within your budget. Swiping a credit card is easy and tempting. However, it enables people to purchase expensive items they are not able to pay for.
- Set aside money in an emergency fund to pay for unanticipated expenses such as a necessary car or home repair. Using cash from your emergency fund avoids having to charge that expense on a credit card. An emergency fund can also help pay the bills after a job loss.
- Limit your number of credit cards. The more credit cards you have, the more you may be tempted to use them. It is not necessary to have a credit card from every retail store. If you must use a credit card, avoid ones that charge a high interest rate.
- Pay off your balance in full every month. This avoids accruing additional interest owed on your balance.
- Avoid using your credit card for cash advances. Credit card companies are not the place to borrow money. Cash advantages usually incur a considerably higher interest rate than regular purchases, and the interest begins immediately, not after a grace period. In addition, there are extra fees involved with cash advances. Do not be tempted to use those checks your credit card company sends you. Those are considered cash advances.
- Carefully scrutinize balance transfer offers. Teaser rates can be tempting, but some transfers involve fees. When the normal interest rate returns, you may be no better off than before the transfer.
The attorneys at Morgan & Morgan are dedicated to providing exceptional legal services pertaining to bankruptcy, workers compensation and disability to the Athens, Georgia metropolitan area. Contact us today for a free consultation.