Nowadays, people have been endowed with several means of fulfilling their dreams which were unheard of even a few decades back. While these lifestyle amenities and facilities may seem indispensable to you, it is very important to priorities your needs and maintain a balance. Options like online purchase and credit card shopping has brought many hitherto unavailable deals within reach for people with various economic capabilities. While the facility to buy an expensive gadget without having enough cash in wallet seems exciting, you should not go overboard. Rampant usage of credit card can lead you in trap of debt sooner than you can realize. Below listed areas some effective tips that you can use to evade credit card induced debt.
A major reason behind accumulating credit card credit is impulse buying. This can affect men and women from all income brackets, but mostly people from lower and middle class backgrounds get more affected. Experts suggest you need to differentiate between what is necessary and what you can do without. There are certain things you need to by every month while there are things that may not be indispensable all over the year.
It is also important that you pay all your bills within due date. Late payment attracts penalty and hikes your rate of interest. Needless to say, it affects your credit score in a negative way.
No matter what type of job you do, it is prudent that you plan a monthly budget at the beginning of every month to avoid unwanted expenses and keep expenditure within limits. It would also be a good idea to keep some amount of money reserved for unforeseen emergency situations.
Credit card companies may bombard you with their lucrative offers and promo deals through email, social media platforms and mobiles. However, you should not use too many credit cards. With a lot of cards, it will become hard for you to pay balances in time. Simply speaking, with few credit cards you face reduced risk of getting into debt.
While the credit card companies stress on freebies and amenities while selling their cards, it is important that you inspect all other details and aspects of a card. The aspects like penalties, interest rates should be analyzed before opting for a card. It is important that you read the card usage terms written in small print. When you understand the methods for using the card that will not make you incur debt, you can be on safe side most of the times.
A lot of credit card owners do not realize the fact that using cash advance feature is akin to paving the way for debt accumulation. You should not use this feature of your card to avoid incurring debt and also remember it requires fees.
You should also need to evade balance transfers to another credit card used by you. If you do this, it has to be for prudent reason, such as obtaining lower interest rate. Or else, you will find your balance going up owing to balance transfer cost charged by the company.