How to Avoid Credit Card Debt

While a credit card is an essential add on for people today, it is important not to confuse it as a substitute for cash. Without reasonable use, you can accrue a lot of debt, without realizing the consequences attached to it. You may be undecided over using your credit card, and it is very important for you to properly assess your credit history before spending more.


  • 1

    Define your budget

    It is important that you set a budget limit to avoid excessive credit card spending. This way you will know how much to spend on certain purchases, within the limit you have set for yourself. Use the credit card mainly in cases of emergency.

  • 2

    Emergency Fund

    If you have a problem sticking to your budget, then it is important to have some sort of back up. The emergency fund is an ideal way to avoid credit card debt as you will have pre-hand cash for various emergencies. Set up a savings account where you put a little portion of your monthly income at all cost.

  • 3


    Knowing that you can pay the cash later on may force you to purchase items or services which you do not necessarily require. These luxury items are not your basic requirements so it is important that use your credit card only for services you can afford. If possible, use your credit card for true necessities, and pay the rest of the amount, (for groceries, meals), in cash.

  • 4

    Make timely payments

    The general rule of thumb when it comes to credit card payments is that you pay it off at the end of each month. Making small payments will not help you as the interest rate charged is relatively higher and further increases with time. If you are finding trouble in paying your credit card payments, simply stop using it for while, at least until you sort out your finances.

  • 5

    Avoid additional services

    It is important that you know the services your credit card offers. Signing up for additional or special services will only create havoc for you due to the higher costs associated with them.

  • 6

    Avoid Cash Advances

    It is a clear signal that something is not right. You will be charged from the moment you get the money, and will further be paying transaction fees and interest rates. Explore other options such as emergency funds in order to obtain the necessary cash you require.

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