Tips For Staying Out Of Credit Card Debt

     There is no doubt that credit cards are now a permanent fixture in our society.  I rarely carry cash anymore.  I can honestly say that the thought of carrying change in my pocket anymore is not appealing.  Even on small purchases of only a few bucks I will use a credit card. But, I am very careful about the use of my credit so I do not build up debt.

     There are many pluses to carrying plastic instead of cash.  Frequent flier miles, buyer rewards, convenience and raising your credit rating are just a few.  However, as many Americans have learned that carrying credit cards is only a convenience if they are used responsibly.  At this point in our history it should be no surprise that credit card debt is a huge issue for millions of Americans.  Once you are in credit card debt, the prospect of getting out of it for good can be daunting.  The best advice would be to avoid it all together.  Buy now and pay later seems to have been an invisible paradigm that most Americans have been living in.  But most can only see when it is already too late that this model does not work.  The easiest thing would be to avoid it altogether.  If you have the discipline to follow a few simple rules you will have a much happier financial life ahead of you.

     1.  Create good credit card spending habits early in life:  How you think, relate and use your credit cards are the primary factors in what will determine whether or not you end up in a messy financial situation in the future.  A credit card should be for convenience of spending money that you have not for spending money that you would like or hope to have. 

     Unfortunately, credit cards give most consumers an experience of wealth.  You can go out and buy anything you want as long as you have a credit card in hand.  You do not even have to ask for permission.  You can just go out and spend on a whim.  Nobody is going to second guess you at the register if it is a good idea to make the purchase or not.  The only one who can do that is you.

     2.  Maintain good records:  You will want to keep all of your credit card receipts and match them to your statement at the end of each month.  Do not assume that your credit card company is going to have your bill correct.  There are millions of dollars a year in mistakes on credit card statements.  It is hard to say how much of that is ever corrected.  If you notice an error, call your credit card company immediately to report it.  The other thing I do is make a photo copy front and back of all of my credit cards.  In case I lose them it is a lot easier to report them lost or stolen because I have someplace to find the numbers to call immediately. 

     3.  Pick your credit cards wisely:  All of the cash back and frequent flier mile programs can come at a high price.  You want to check the APR or annual percentage rate very carefully before you sign up for a card.  Compare different credit card offers on  You also want to find out if their interest rates are fixed or variable.  You also want to see what the rate can go to in the event that you are late on a payment.  Mistakes happen; I know plenty of people with good credit that accidentally missed a payment.  Per the contract that you have signed with your credit card company they can raise your rates for missed or late payments.  I have heard of some companies raising their rates as high as 29% because of a late payment.

     4.  Most importantly, pay your bill in full each month.  If you do not think you can do this when the bill comes, put the cards in a place where you know that you will not use them.  You may want to leave them at your mother in laws.

     Credit cards can be a great convenience, but they can also be a big headache if not used responsibly.  If you cannot pay your bill in full at the end of the month, quit using them.  Ben Franklin once said that he would rather go to bed hungry rather than wake up in debt.