Although getting yourself into debt is not recommended, sometimes having credit and using it wisely is good practice. For example, many of us choose to buy items online with our credit cards as it offers us additional levels of protection over a debit card.
However, it can be easy to mismanage your credit card, so here are some our 4 Tips for Avoiding Credit Card Debt, meaning that you can learn how to use your credit card to your advantage:
1: Pay off Your Balance in Full – Although this is often easier said than done, paying off your credit card balance in full every month makes financial sense. This way you can avoid having to pay interest on your purchases.
2: Check the APR – If you have a poor credit rating then chances are you will be paying more than the typical APR. Shop around and see which credit cards can offer you the best APR, so that if you cannot afford to pay off your balance then you will not be paying more than you need to.
This tip is particularly important if you have a store card, or are thinking about getting one. Store cards typically come with a higher APR than standard credit cards, so they are often always worth avoiding.
3: Check the APR, again – It is important that you understand the APR of your credit card. Most credit cards have two separate APRs – one for card purchases and one for cash advances.
One of the slippiest ways to end up in high levels of debt is to treat your credit card in the same way that you would your debit card, by drawing out cash from the hole in the wall. This is not recommend as the APR for cash advances is normally much higher than when paying with your card.
4: Check the APR one last time – You may find that you are tempted in by a low cost APR from your credit card company. But these introductory rates are only temporary, once it has expired then you are more likely to be hit with a higher APR.
However, if you are savvy with your credit card commitments then you might want to take advantage of the low-rates or 0% APR deals which are currently on the market. It is essential that you know how long the deal lasts and what the APR will be once the offer has expired.
Is it too late to avoid credit card debt?
It is easy for credit card spending to get out of control. If you find that it is a struggle to pay back your debts, it is important that you seek debt help as soon as possible. Credit card debt can be dealt with and Harrington Brooks can show you how.