Credit card debt, and other forms of debt, can make it hard to make big financial changes in your life. Once you’re on the hook, you are working just to pay these debts off. The following are a few tips that should help you avoid getting into credit card debt.
Figure Out Your Budget as Soon as Possible
Yes, the easiest way to avoid credit card debt is to avoid getting a card, but that isn’t always an option. If you have to get one, don’t make the mistake of thinking the money on your credit card is just extra money you can spend frivolously. You need to make sure you create a budget you can deal with, and your credit card should be included in that plan. If you look at your card in this way, it’ll be easier to pay it off, which is incredibly important if you want to avoid going into debt.
Don’t Overlook the Importance of Paying
It’s important to pay on time. Late payments come with additional fees, and you don’t want to give these credit companies any more money than you are already giving them. Remember, there’s usually an APR to consider. If you see an opportunity to pay off a credit card, then make sure you take it. The sooner you can stop paying on this card, the easier life will be for you.
Dealing With Emergencies Differently
One big reason folks get a credit card is to deal with emergencies. This does make sense, but the truth is you don’t always have to turn to credit cards. If you’re trying to stay away from credit cards, then you could turn to installment loans. Of course, you still have to pay the loans off on time, but at least you won’t be resorting to credit cards. Like any other loan, make sure you read the fine print so that you know what to expect.
Learn the Difference Between Wants and Needs
Some folks get into credit card debt because they don’t know the difference between a want and a need. You need to make sure you know the difference so that you can control your spending more effectively. Start a list of the two and think about what you need to live and what you just want. For example, those new shoes you want may not be a necessity if you’ve got a good pair already. That stop at an ice cream shop is just for pleasure, and you know that’s not a necessity. This doesn’t mean you should exclude all nice things in life; just be aware of what’s important. The sooner you can cut wants, the better you’ll be at avoiding debt.
Avoid Taking Out Cash Advances
Cash advances are there for emergencies, but you’ll want to stay away from them if you can. These come with all sorts of hidden fees. You don’t want to deal with this when you don’t have to. It’s easy to get tempted to use this feature. Your credit card is accepted nearly everywhere, so getting some cash seems easy, but if it’s not an emergency, it’ll be better to wait this out. If it is an emergency, then you’ve got alternatives like the ones mentioned earlier.
Get Friends or Family Members to Help
Some folks think they can’t handle having a credit card or think they are just too impulsive. One thing you could do is talk to friends or family members and ask these folks to help you. You’ll be accountable to your friends or family members. You can return the favor if they want. Having someone there to prevent you from making a financial mistake is powerful. Those who prefer to keep this to themselves could just reach out to a professional financial planner. These folks can help you stay free from debt and may even help you create new streams of income.
These are just some things you can do to stay away from this kind of debt, but there’s so much more to consider, like making sure you read the fine print before opening up a new credit card line. If you want any more suggestions, your financial planner could help.