Credit card debt has become a major international issue. Access to credit cards has become a lot easier these days. As a result, more people have become less disciplined when it comes to their use. Given the fact that the cards are accepted even in smaller stores, people are easily tempted to just use the card. Before they know it, debt has already piled up. Add to that the fact that there are people who are still paying off their student loans and other debts. With a credit card on hand, it is easy to have the other debts paid off.
Due to the availability of instant money, more people have gotten deeper into debt, to the point that they are no longer able to repay it. They simply have to pay the interest rates and penalties for late payments. It does not mean though that you should not use credit cards. You can still use them provided that you are wise in doing the transactions.
Here are some tips to help you. For more financial tips to help you deal with your credit card issues and related finances, check out Doughroller.
Pay off the balance each month
It goes without saying that you should only borrow what you can afford to repay. Don’t borrow an amount or buy products that are way too expensive. The good thing when you pay the exact amount that you have borrowed each month is that you are getting an interest-free loan. You won’t have to pay any interest. It is tough when the amount is way higher than what you earn, so you need to be careful with each transaction.
Avoid using credit cards for smaller purchases
It is easy to forget that you have actually used the card if you only borrow a small amount. Smaller purchases worth less than a hundred won’t seem to matter. However, when the amount adds up, it can be surprising. It helps if you always bring cash so you don’t overspend. Just use the credit card for bigger expenses or items that you can repay on an installment basis.
Cash advances should be avoided
Interest rates are high for credit cards used for cash advances. This is on top of the bank and ATM fees that you will incur. You should just use cash or the money that you already have on hand instead of the credit card.
Pay as soon as the credit card bill arrives
The problem with people is that when they are too busy, they tend to forget that they still have several bills yet to pay. As a result, they make use of their money for things that are unnecessary. When it comes to credit cards, late payment even by one day will already result in a huge penalty. If unpaid over the next days, this amount could grow even bigger. Make it a habit to pay early.
Keep all receipts
It is easy to get lost when you don’t know exactly how much you are spending. It helps if you keep all your receipts. You should also turn on your credit card alert system, so all transactions are reflected on your phone. You may even download an app that allows you to track your credit limit.
Use one major credit card only
If you want to avoid overspending, use only one card. It is easy to jump from one credit card to another if you see that one has a bigger credit limit that you can still use.