Monday, April 22, 2013

How To Use Your Credit Cards So It Doesn't Lead to Debt

Most of the time, people burdened with credit card debt are encouraged to give up using them for purchases. The whole concept of these plastic cards teach consumers bad spending habits. It gives them the ability to buy things even if they do not have the cash to pay it off. That makes it difficult to live within one’s means.

However, there are instances wherein people are forced to use their credit cards. If you find yourself in this situation, there are techniques to use them without putting yourself in debt for it. Here are some important guidelines when using your card.

If you will keep a credit card, make sure you impose rules as to when you can use it. If you want to keep a card for emergencies, define what constitutes an emergency. It is best not to use card for your basic purchases. Make sure the definition is clear and you can stick to it.

Secondly, you need to go back to the fine prints of your credit card agreement. This is the piece of paper you signed when you applied for your card. You need to find out the grace period of your account. This is the time between the end date of your billing cycle and the due date of your billing statement. If you pay your purchase in full within this period, you will not be given an interest. That is the best way for you to keep your payments small. If you cannot find the signed agreement, call your credit card company to inquire.

After every purchase, you will always be required to sign a slip of paper with the amount of your purchase. Make sure that you encircle the amount to guarantee that it is the right amount that should be charged to you. Then you can sign the paper. Keep your copy for reference purposes and be ready with that amount when the billing statement comes in.

If you want to use it for expensive purchases, try not to go over 30% of your credit card limit. You should also create a payment plan to help keep track and make sure that the contributions are made on time.

These are only a few of the things that you should do so you can continue using your credit card without it leading to any debt. In truth, using these cards does not have to lead to destruction - at least if you use them correctly.

Practicing smart spending habits will guarantee that you will not get into any financial troubles. Even if you are paying in cash, there is still the possibility of you putting yourself in debt. Credit cards are not the sole culprit in debt. You need to develop the right habits that displays the right financial management skills. Know how much you can afford to spend every month and stick to it. You should also build up your reserve fund so that you will not miss any payment in case your credit card payments end up being compromised.

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