5 tips to avoid Credit Card Debt

Depending on who you talk with, people either love or hate their credit cards. Some argue that credit cards are a great tool for managing your finances. In truth, if they’re not used correctly, they can lead to debt and a lot of financial stress.

One thing most people agree on is they’d like credit card debt gone from their life. Here’s how to get on top of your credit card debt today.

  1. Keep track of your spending. To get on top of your credit cards you need to pay close attention and start to question the transactions you’re putting through. This will help you to avoid overspending and building up even more debt.
  2. Avoid impulse buying. If you’re going to use a credit card it should only be for planned transactions. Where people often go wrong with credit cards is thinking that it gives them a licence to spend on something new or shiny just because it catches their eye. It’s easy to swipe your card and walk out with a brand-new purchase. However, when you add up those transactions at the end of the week or month you could be shocked to find that you’ve spent a lot more than you thought.
  3. Always pay the card off in full. At the end of every month make sure you can clear the card in full. If this is not possible it should be taken as a clear sign that you’ve overspent. Using your credit card wisely means that you’ve planned ahead and already have the money available to pay off the purchase that you’re about to put onto the card. In this way you’re never going into debt and will only be using the card for convenience.
  4. Use a budget. To avoid falling into a debt trap you need a personal budget. People often think that a budget is restrictive, however it’s simply a set of instructions that you give to your money. When we’re in charge of our money we can tell it where we’d like it to go, and the things we’d like it to achieve for us. Using a budget is also where we can find the savings to pay off our credit card debt asap. Remember, the best way to improve our financial wellbeing is to spend on the things that are truly important to us, not the things that happen to be on sale this month.
  5. One card only. A big mistake many people make is having more than one credit card. It’s hard enough keeping track of the transactions on one card let alone multiplying that by a factor of two, three, five, or more cards. Do you research using online comparison sites to find the best card for your situation.
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