How to avoid getting into debt

(Nadeem Israr, Karachi)

Nowadays, the main source of debt creating is usually considered in the usage of credit cards and people who carry credit cards are on risk of indulging in debt. Consequently, when you use the credit card, you have to face many sacrifices to re-pay the dues against the usages you made. To use the credit card rationally, there are some tips which can be helpful for controlling credit card debt.

1. Maintain an emergency fund
Usually you generate credit card debt for major car repairing or medical expenses. Due to having no savings, you find no way instead of paying from credit card. In this situation, an emergency fund doesn’t let you utilize your credit card.

2. Charge as per your affordability
Whenever you go for shopping, first see your affordability for the good you want to purchase. If purchasing the good on cash looks un-affordable, then don’t purchase.

3. Unnecessary transfer of balances.
Stop balance transferring from card to card for avoiding due dates. If there is a lower interest rate in transferring the balance then it looks that you are going to take the benefit of it. Otherwise, this practice only decreases your balance due to balance transfer fee.
4. Don’t skip payment of credit card
Paying regularly to credit card is the best way for avoiding its swelling. Once you miss your payment in any month then for next month you will be burdened enough for paying two months amount along with late fee charges. In this drastic situation, you may use another credit card as to making both ends meet.

5. Pay full balance on monthly basis.
For avoiding credit card debt, paying off credit balance on monthly basis looks appropriate. In this way, you don’t have burden of balance and also eliminate the risk of getting into the credit card debt. Having paid full, you do never worry about minimum payment and this practice also shows that you spend rationally, allowing yourself only to purchase what you can afford.

6. Know the signs of credit card debt.
Most often people don’t pay attentions on the warning signs of credit card debt and keep using the card and consequently cross the limit. Recognizing the signs of credit card debt timely, gets you stop using it further and you get away from going into debt altogether.

7. Abstain from cash advances.
When you pay cash using your credit card, you may face troubles in financial matters. Instead of that, withdrawing cash from bank for this usage would be a rational choice. As the cash advance is the initial stage of credit card debt. So working on fixing budget for creating an emergency fund is a good practice to abstain from cash advances.

8. Don’t lend your credit card.
When you give your credit card to anyone for using, he may use it extravagantly and it means you will have to pay for the debt for your not making expenditures and ultimately it will suffer you with the credit card debt.

9. Apprehend your credit card terms.
Get full apprehension of credit card agreement and pay full attention on how interest will be applied and when you will be charged a fee. Knowing about these features of your credit card will make you fully aware at the time of using your credit card.

10. Keep your number of credit cards in limit.
The more credit cards in numbers you have, the more charges you will have to bear for them. Don’t try to temper yourself that you have thousands of dollars available in your credit cards. Eliminate the number of credit card to avoid the credit card debt.

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07 Jan, 2019 Views: 283


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