Avoid Credit Card Debt the Right Way

Credit cards are important in building a credit profile, but it is good to learn to avoid credit card debt. You do no need to have a mountain of debt simply because you use credit cards. Using credit cards responsibly can help boost your credit score and help you financially when you make large purchase. They are also extremely convenient and offer safety and security for online transactions. Just be sure to follow a few rules to keep your credit card debt under control.

Open Few Cards

You do not need to open a card in every department store you walk into simpy because they offer you a 10 percent discount. Stick to only opening a few major credit cards. You want to look for cards with low interest rates and no annual fees. You can also look for the cards with the best perks, like cash back or frequent flier miles. Having fewer cards will make it easier to pay the bills and keep you from having high credit limits that can get you into trouble.

Spend Wisely

Credit cards are a useful tool to the consumer. They allow you to build a credit history, make purchases that aren't linked to your bank accounts and use for an emergency when you car breaks down and you don't have the cash to fix it. Many people use a credit cards as a way of buying things they cannot afford to buy. This is the wrong reason to use credit. If you want something and can't buy it now, then you need to save for a few months until you can afford it. Immediate gratification is what gets credit card users into mountains of debt.

A smart way to utilize credit cards is to make small purchases, like gasoline for your car. You don't want o have a high balance to limit ratio. So if your limit is only $500 on your cards, you never want to go over about $150. So making small purchases will keep your balance low.

Always Pay In Full

Be sure you pay off your card when you can because you do not want to pay interest, late fees or over the limit fees. A good way to be sure you can afford to pay in full every month is to purchase only the things you normally would have bought with debit or cash. Buying frivolous or large purchases will leave you unable to pay at the end of the month and costing you  much more in the end. Use your card to build your credit profile and post charges and payoffs on your credit profile. Once you have a balance that you are unable to pay, the interest and fees keep adding up and the balance quickly grows. This is where many credit card users find their debt has become unmanageable.

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