Maybe you just got your first credit card or have been having credit cards for a while, you need to know best ways to avoid credit card debt. You don’t even want to find out what’s going to happen if you don’t pay your credit card debt, so with that being said, lets talk about ways you can use to eliminate credit card debt.
I’ve been in credit card debt since I got my first credit card and I can tell you one thing about it: It will turn your life into $hit! You simply don’t want to get to the situation where you’re thinking about ways to paying off credit card debt.
Credit card debt will bring more debt, meaning that even if you decide to get a high interest payday loan to payoff your credit cards, you’ll still be in debt and this situation will get so nasty sometimes that you’ll have to do a full credit card debt settlement, and that’s the rock bottom for your credit score and your financial life, because after that, you won’t be able to buy anything with your credit.
So with all of that being said, lets see how you can avoid credit card debt:
#1: Don’t carry your credit cards around (most important)
I have 12 credit cards at this point and with my credit card debt experience, I know myself very well so I don’t carry my credit cards around all times. I usually have my debit cards and ONE credit card so I can use in case something happens. (with my current income, I can max-out all of my credit in a day and pay it off tomorrow, but I still don’t carry my credit cards around!)
Having all of your credit cards with you will tempt you to spend it on things that you simply don’t need. You obviously like the things you’ll buy so you’ll be making excuses to justify why you had to spend $1500 on a new apple laptop when you have a perfectly fine laptop at home.
#2: Your credit card limit should be half of your monthly income
One of the best ways to not fall into a load of credit card debt is to not have too many credit cards in first place. For me, I have around 15k in credit cards (I’m 22) and I earn around 30k a month, so I’m obeying the credit card to income rule. This way I’m sure that I can payoff my credit cards if something happens.
#3: Think about how you want to pay it off before buying anything.
Lets say you have a 5k credit line and you earn 10k a month and you want to buy a new awesome gadget that is going to put a $4,000 hole in your pocket. Before purchasing this awesome new thing, you should think about how exactly you’re going to pay it off next month or in your next billing cycle (it’s important to know your credit cards’ billing cycles!).
Think about are you going to end up with enough money to make the payment or not? because you don’t want to enter to the minimum payment land…
Side note: minimum payment land…
Accidents happen, you might have to spend the money you don’t have (from your credit cards) on something very important and from next month since you can’t afford to pay it all, you start making minimum payments, and that’s dangerous.
If you end up spending too much, make sure to pay as much as you actually can, not just a minimum payment. This way you’ll keep yourself motivated to pay the full balance in next weeks and months to come.