Many people found themselves land in heavy card debts after a few years of using credit cards. There are ways to get the benefit from the cards but at the same time, not land yourself in debt.
People often see the benefits and discounts that they will get from credit cards but they forgot one important point, that is, how to avoid landing yourself in heavy debt with credit cards. Yes, I know there are many benefits you get, discounts when you shop online, discounts at an eatery, 0% installments, and many many more. But don’t forget, when there are pros, there are also cons.
Ways to avoid landing in debt
So, the question is, how should we avoid landing ourselves in debt with credit cards?
1. Set the limit of your credit card to not more than 50% of your salary
– Eg. if you earn 3k, set the limit to be 1k.
– This method might not apply to all, so the next step would be setting a limit where you can pay it off every month.
2. Always try to keep track of what you are spending with your credit card
Most of us are using smartphones and there are so many apps out there to keep track of our expenses. Make full use of those, the current app that I’m using is Spending Tracker by MH Riley Ltd. I find that it is really useful because I can set a budget monthly for each account that I’ve created.
3. Always try to pay off the amount that you have to spend on credit cards
Try to clear your credit card payment monthly and not accumulate them. The interest for credit cards is very high and when the sum snowballs, that is when you find yourself in heavy debt.
4. If possible, try not to use your credit card
If there is no discount for your credit cards, try to use a debit card instead. Serves the purpose of cashless transaction but spending your own money at the same time. To me, I see a credit card as future money, money that belongs to the bank, using them will make me pay more if I’m not able to clear the payment monthly.
5. NEVER use a credit card to cover other credit card bills
I know some people tend to use new credit cards to cover up the previous credit cards bills, which will only make matters worse. If you realize that you are in heavy debt, change your lifestyle, start saving and spending cash instead of credit cards. Must always remember to clear your bills and not accumulate.
Always watch what you are spending with your credit cards and clear your credit card bills monthly. Hope these ways will help to guide people who have just started using credit cards!
Leave a Reply