Credit cards do not deserve the bad reputation they sometimes get. Credit cards make it easy to perform necessary purchases when short on cash. Also, credit card accounts come with a number of purchasing protections not found with cash. All of these positives shouldn’t be ignored. Nor should the dangers of credit card debt be ignored either.
Credit cards debt can be tough to pay back due to the interest on the cards. Some might borrow so far beyond their means even a moderate interest credit card is tough to repay.
Credit debt is a problem that has to eventually be dealt with. Dealing with debt is tough. Maybe the best step is to not get into heavy debt in the first place. Four specific steps can be taken to cut down on building up troubling amounts of credit card debt. These steps are worth implementing and taking seriously.
1.) Do not use a credit card as an endless entertainment fund.
Entertainment and leisure purchases are, in truth, highly unnecessary. The should not become a priority in a person’s life to the point he or she is charging money again and again to purchase more and more. All this is going to do is compile a huge amount of debt. Credit scores end up collapsing when this occurs.
Other than taking out a bad credit loan, options for further borrowing are dramatically reduced. And the borrowing might not be for leisure buys. A loan may be needed to pay for something very important might be necessary. With unnecessarily maxed out credit cards, using the cards for a legitimate purchase could be curtailed.
2.) Avoid paying only the monthly minimum.
Paying the monthly minimum every 30 days is not going to reduce debt one bit. Paying the minimum and continuing to use the credit card is going to further run up debt and make the balance impossible to pay off.
Anyone limited to paying the minimum amount per month must come to the conclusion he/she is in dire credit card debt. Steps such as taking out a consolidation loan is best seriously considered in order to reverse the situation.
3.) Do not apply for too many credit cards.
The more credit cards a person has, the more money can be charged. In a similar vein, the higher the limits on the credit cards, the higher the threshold for maxing out the cards become. Yes, having access to credit when needed is definitely important. Emergencies do arise and people end up being reliant on a credit card or a loan to cover the costs.
All of this assumes the person taking out the credit card account is going to be fiscally responsible. Those who cannot trust themselves to borrow within their means really should be keeping the number of active credit accounts low. Borrowing limits should not be ridiculously high or they will end up maxed in short order.
4.) Save cash and keep it safe.
Putting money into a money market or other account for safekeeping is strongly advised. This way, when an emergency arises, the ability to pay all or part with cash is possible. The amount charged onto a credit card account ends up being reduced which, in turn, reduces the amount of debt.
This bit of advice may fall under the easier said than done category. Yet, it still can be done. If not, then the odds of going into debt rise. Once debt is out of control, cutting the debt down becomes a very long and grueling task. Why not cut down on building up the debt before it gets to be too much to handle?