Getting into the debt trap with credit cards is not as hard as it is to get out of it. Quite easily, you can fall into a grave financial situation. Rather, while many people are aware that they are not supposed to avoid debt traps, already it has seemed like a common phenomenon to see people commit this mistake every now and then. The cards are deemed as evil by many, but truthfully, they’ve got nothing to do with the debts. It is the individual who makes use of the plastic and is accountable for the problem.
Always it has been said that prevention is better than cure. This is a saying that not only is applicable to bodily illness, but also to credit card debt as well. If you have an inclination on the elimination of getting into the debt trap with credit cards, mentioned below are the simple ways that may be of great assistance to you:
Live Within Your Funds
Encouragement has been made by the credit cards for the practice of buying now and paying later. This is one of the many reasons that people fall into a grave financial situation. Quite frequently, people are not able to make out that they have actually overspent until they are no longer able to disburse their bills. For you to avoid getting into debt with cards, you must have the capability of living within your means. Never should you spend on unwanted things as much as possible and spend only what you believe you are able to repay back after a certain period.
Make Yourself Familiar with the Working of Balance Transfer
If you are already on the brink of struggling with debt, using balance transfer may provide you assistance in the redemption of your situation. Transferring balances can provide you assistance in the elimination of the debt trap if done correctly and responsibly. The trick is picking the right transfer card and using it just for the intended purpose.
Always Have Cash on Hand and Use Cards Only When Necessary
Never should you rely heavily on your card. As far as probable, have cash on hand to pay popular. This will lend you a hand in avoiding to go over your budget.
Avoid Withdrawing Cash from Your Card
As much as probable, never use the cash advance feature of your card. While it may be a convenient way of obtaining cash, Also it puts you at high risk of debt-incurring. Cash advances are in the requisition office and it may even charge interest rates that are high, as dependent on the amount withdrawn by you.
Full Payment for Each Billing Period
All cards are having a minimum payment, requisite every month. While it may be a good option for you, it is not recommended. Always it is better to pay in full, each billing period to avoid certain fees as well as charges and even to eliminate accumulating balances.
Fight the Urge to Buy on Impulse
While a card is nearly a plastic tool in your wallet, It does tempt you to make big purchases. The 0% APR, the discounts, and the rewards are just difficult to fight off. Controlling impulse purchases takes a lot of self-restraint and responsibility, but it can greatly help you to avoid getting into the debt trap.
Golden Rules for Debt Trap Eliminations
- Only Borrow for Things that Appreciate in Value: Know the difference in the midst of good debt and bad debt.
What about a car loan? Is this good or bad? Well, generally you should save to buy a car, but if transport is essential, other than being just a desire, sometimes you may need to borrow. But make sure it is the smallest amount possible, as a motor vehicle depreciates as soon as it’s driven off the lot. And it’s so easy to end up owing more than the car is worth. Better still, get a cheap car that will get you from A-B and SAVE for an upgrade.
- Always Pay your Credit Card in full Each month: Just place things on your credit card that you know you can pay for when the bill comes in.
Do you really need the latest technical gadget? These days you will find that electronics almost always depreciate in value. So why would you go out and use a credit card to buy an expensive electronic gadget when it will lose its value after its purchase?
Always shop at the sales – most people love to get a bargain. But don’t get carried away by buying something that’s too minute and ill-fitting or something that you wouldn’t even consider buying normally at full price. That bargain may end up forever with the price tag hanging off, and that’s not a bargain.
In your budget, you should have catered for clothing so stick to the limit you set yourself and don’t load up the credit card.
It may be hard to maintain a debt-free lifestyle sometimes, but with strong determination, it is really possible. If you are able to use your credit cards responsibly and you make sure to never go beyond your budget while using the plastic, avoiding the debt trap may seem like a breeze for you.