How To Use A Credit Card Smartly to Avoid Debt Burden?
A credit card is surely one of the best instruments that can be used to meet immediate money needs. This plastic money comes handy to fulfill all your financial needs in the best way. But using your credit card smartly is equally important to avoid credit card debt. Yes, one should be a smart spender and needs to take some effective measures to keep the debt burden away. Timely bill repayment, resisting unnecessary shopping temptation, avoid using multiple credit cards, monitoring your spending patterns
Pay Your Bills on Time: Paying your credit card bills on time helps in avoiding debt. Yes, timely repayments mean no late payment charges or penalty hence zero debt. Thus, a credit card holder should always pay his bills on time to avoid such charges as it helps in keeping the debt burden away.
Avoid Making Minimum Payments Alone: While paying your credit card bills, it would be advisable to avoid making minimum payments. Yes, the moment you pay the minimum due to your current month the remaining balance will reflect in your next month’s billing cycle. And, the same pattern will follow if you keep on doing the same every month. Thus, the penalty keeps on increasing and ultimately you are in debt. So, ensure to clear your dues completely and make the full payment to stay away from this dbt pattern.
Resist Unnecessary Shopping Temptations: Be a smart credit card spender and avoid spending unnecessarily. The more you get tempted towards lucrative offers, the worse it will get for you. After all, the same amount, you need to pay back to the bank. And, if you spend more, the amount gets on increasing hence more debt on your shoulders. So, control your temptations and spend wisely by knowing your needs first.
Stay Away from False Offers: Be alert and use your mind instead of the heart. Know your needs first and then spend accordingly. The majority of false offers are just to lure or rather trap you in the debt. So, it would be advisable to stay away from such traps so as to enjoy a debt-free credit card journey.
Avoid Using Multiple Credit Cards: Do not use multiple credit cards as managing them is also difficult. Yes, different credit cards have different billing cycles and so is their last due date. And, carrying many cards means more usage of the same and which leads to the debt trap. It is easier to manage one credit card than carrying multiple credit cards. It is advisable to carry 1 or 2 credit cards in the case of emergency but carrying more than that.
Monitor Your Spending Patterns: Watchout your spending patterns and see where you are spending unnecessarily. Keep a copy of all your bills and evaluate your spending habits. You can also check your monthly credit card statements and look for any unnecessary spending. Doing a thorough evaluation of the same will help in the correction. At least, you can know where you are spending extra hence can control your spending cravings.
Do Not Give Your Credit Card to Others: Do not trust anyone blindly. And, never share your credit card details even with your dear ones. You never know as someone might misuse your credit card and put you in debt. Details like Credit Card Number, PIN and CVV Number are highly confidential. Hence, advised not to share with anyone to avoid the possibility of fraud transactions and credit card trap.
Never Take Cash Advances: The best way to avoid your debt burden is to never withdraw cash from your credit card. Withdrawing cash from your credit card can put you in a debt as the interest rate on the withdrawal amount will be high. Also, there are cash withdrawal charges that you need to bear on using your card for advance cash withdrawal.
So, hope you will keep these tips in mind and follow them to avoid the credit card debt trap.