If you donâ€™t understand the concept of credit cards and you are using them often, you could be asking to get into credit card debt. It can happen quickly when you let your spending get out of control. And, depending on how much youâ€™re paying in interest, you could be spending a lot more than you originally intended on the items you bought with your credit cards.
There is help out there for credit card debt, but there are things that you can do in order to stay away from that debt in the first place. The best way to avoid credit card debt is to avoid credit cards. However, since they can help you get good credit, not just bad, here are some of the ways you can use them more wisely.
Only Use Them For Emergency
First off, when you apply for a credit card it makes sense to get them with a use in mind. There are store cards that are just to use at that particular store, and how often do you really have an Ulta emergency or even a Hot Topic emergency? However, some store cards, like big box stores, could help you in food emergencies or in emergencies involving livelihood and work issues (needing a new phone or a new laptop).
Regular credit cards, however, donâ€™t force you to shop in one particular store and can cause you to want to use them anywhere. Instead of spending with this type of card willy-nilly, make a plan to only use it for things that cost a certain amount of money (like major purchases over two-hundred dollars) or to only use it when your car breaks down (or something to that effect).
Make More Than Minimum Payments
If you arenâ€™t paying more than just your minimum payments on your credit cards then itâ€™s pretty likely that youâ€™re paying more money for what you bought with them. Compensate over your payment for the interest rates youâ€™re paying. Pay off the entire amount anytime you can.
Minimum payments, especially on a card that you pay to own (mainly for people with bad credit), might not be enough to really cover all that much of your bill once the interest rates get added on.
Donâ€™t Fall For Gimmicks
Are you going to use those points you earned? Many credit cards offer gimmicks to get people to sign up for them. Some of them arenâ€™t worth it at all, and some of them arenâ€™t worth it just because youâ€™re not going to use them anyway.
If you never fly anywhere you donâ€™t need a credit card that gives you rewards in air miles. If you get a card that only gives you points back at the grocery store but you always pay with your debit at the grocery store do you need to be paying extra on interest rates to have it when it isnâ€™t even giving you those points? Do some research, find the card(s) that work right for you and your pocket.