The Secret to Avoiding Credit Card Debt

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Credit cards are almost a necessity in the 21st century. They are great for emergencies, help you establish credit and are great convenience in today’s fast paced lifestyle. They can also be the source of great financial hardship if not used wisely and properly. That available line of credit can be very tempting, especially when you only have to pay a fraction of the balance monthly. Compound this with a high interest rate and the potential for financial distress becomes very real. Here are some ways to keep your credit card balances under control.

Think of credit cards as cash. If you carry a balance and only make the minimum payment, you will be making payment for a very long time. Credit cards that are used like loans will keep you in debt for a very long time. However, if you use them like cash and pay them off in full monthly, they can be very handy. They will save you from having to carry a large quantity of cash and there are many rewards that can be had through the use of credit cards.

Make your payment by the due date. Credit cards do not have a grace period. Your due date is your due date and if the credit card company does not have your payment in their hands by then, you will be accessed a late fee. Some late fees may be as high as $50.
Keep the number of credit cards you have to a minimum. If you use the cards wisely, one or two should do it.

Avoid purchasing the services offered by credit card companies. They are often unnecessary and expensive.

Review your statement monthly for accuracy. You would be surprised at how many things get billed to you credit card without your knowledge. It is your responsibility to report inaccuracies in to your credit card company.

Never take a cash advance out on a credit card. In most cases, you will be charged a transaction fee. The interest rates on a cash advance will be at a minimum of 20%. Lastly, there is no grace period with cash advances. Interest begins accruing the moment the cash is put in your hand.
If you follow these simple rules, use common sense and live within your means, your credit cards can offer you many rewards and can be a great convenience in your life.