How Not to Be Buried in Credit Card Debts
June 30, 2010 by admin
Almost everyone has at least one credit card in his or her wallet and with some recent reforms in the card industry, consumers are increasingly looking for ways to pair their credit card debts. We use it to purchase items, pay our bills, and even to fund electronic payment systems like Paypal and Moneybookers. These “plastics†have revolutionized the way we shop, manage our bills, and transact business, but the sad part is that many of us incur a lot of debts because of our lack of control when using our credit cards.
There is nothing wrong with owning a credit card. If you are buried in debts now, you should not blame it entirely on the credit card company but rather, you should also be aware that you are partly at fault. It is important to start taking control of our spending in order for us to keep our outstanding balance at a minimum so that we will not have a hard time paying it off.
For people who want to avoid the pitfalls of having high credit card debts, here are some effective ways you can follow. These are simple and straightforward tips that any person can use and be good at, as long as there is discipline, self-control, and commitment not to be financially crippled.
1. Know that a credit card is not a money source. The problem lies with the notion that it is okay to “borrow money†from our credit card and pay it “later.†Such perception will be embedded in our subconscious mind and without realizing it, we will keep using our credit card to pay for things that are not part of our budget. Next thing you know, you are already buried in debts and have no means to pay it.
2. Pay in full on time, all the time. It is perfectly all right to use your credit card to pay for your daily necessities such as for groceries and utility bills. As long as you pay on or before the due date, you will not be charged finance charges. But, paying only the minimum amount due will just trigger your outstanding balance to accumulate over time and is never recommended.
3. Do not collect credit cards. By this we mean you should not have a lot of credit cards. It is advisable to have two at most- one card is ideal. This way it will be easy for you to track your spending, due dates, and balances. Having four or more cards is not a status symbol so do not get the wrong idea of signing up with as many companies as possible in order to be part of “the elite.†This will only get you into more debts.
Just remember: a credit card is a good thing so as long as you use it wisely. Follow the above tips and you will not only be a smart credit card user, but you will also get a good credit rating.