Avoid Credit Card Debt - A Tale of One Survivor

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Avoid credit card debt, that's what everybody is saying. What they do not know is it is not as easy as all that. I know, credit cards have to be used wisely or you could get buried in a mountain of debt. And some of us do not have the discipline not to charge what we cannot afford.

So is this plastic money the devil that it is cracked up to be? Not at all for if we buy only what we can afford and pay the full balance on time, we will not be in trouble at all. Wise use of plastic money can be very convenient. Not only is it useful in case of emergencies, but also it helps us build good credit.

So how can we avoid credit card debt? And why should we even try to avoid this responsibility? Evading it will only make the matter worse. Can you imagine having to shell out money you worked hard to earn in interest? Why, that's crazy. That alone will make anyone go on overdrive and make it a top priority.

Before a friend of mine became serious about this situation was when she looked at her credit balance each month and it was not changing. Despite the minimum amount paid out, that total was not budging at all. Well, that's when she started to see the light and got serious.

So from time to time she paid it all and brought it down to zero. Boy, did that ever feel good. But guess what, the sales came on at Dillard's, then at Ross, at TJMaxx and she was hooked. The amount she owed started to creep up again and it was so scary because it was flirting close to the limit. Then there was another sale!

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She told me that a cold sweat went down her spine. She knew that one setback will thrust her into a financial hole. Her credit rating was in jeopardy. What could she do? She cried feeling stupid. She wasn't going to go and apply for bankruptcy. No way, Jose! What would her friends say? So she studied the matter and found a way to avoid credit card debt:

  • Stop buying on credit or charge only what you can pay for in cash. Don't use it like a credit card. Use it like cash instead. Or don't use it at all until after you pay the entire balance off.
  • Post the debts on the bulletin board for everyone in the family to see. This is a good way to avoid credit card debt.
  • Quit using the credit card as a loan. A balance that one does not pay off in full is like a loan, a high interest loan.
  • Create a budget. A budget will reveal what one cannot afford. Use the credit card only if the budget is showing a surplus.
  • Pay the balance in full each month. So before using the credit card ask if there is money in the bank to cover the purchase. Those who cannot do this should not carry the credit cards around.
  • Don't make any cash advances as they incur fees, higher interest rate and there is no grace period, meaning you pay the high interest the minute you obtain a cash advance.
  • Just have one or two cards in your wallet. It is easier to keep track of their interest rates and other terms.
  • Payment should always be on time on any of the bills because even if payment to the credit card is on time, they can still raise the interest rate if one is late in paying the other bills like the telephone, TV and others.
  • Know by heart the interest rate in the credit card, not only the one offered but also the interest rate the card company is actually charging.
  • Read the terms and conditions that came with the card, including the fine print.
  • Shop around for the right card. This could save you thousands of dollars and one way to avoid credit card debt.

My friend learned her lesson well but she felt she should have a credit card for emergency purposes. Like her, if you feel you must absolutely have a credit card for once-a-year gathering of friends or some other event, as long as you promise to use it responsibly, then I will tell you my most favorite of all credit cards. They have everything I need in a creditcard.

So there you are the rules to follow on this type of financial crisis. They are such a good deal if the consumers obey the rules. Imagine not having to carry wads of money to make purchases just because there might be a sale. So next time you are tempted to use them, make sure you follow the rules on how to avoid credit card debt.

This credit crunch slayer may smash your way out of debt by learning how to budget your income and putting money in your pocket where it belongs. Try it and see if it works for you.


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