Avoiding Credit Card Debt
5 Things You Should Keep In Mind Before Swiping Plastic
Most Americans find themselves struggling with credit card debt at some point during their lives ‐‐ and as we work hard to ensure here at Madison Monroe and Associates, these types of unfortunate situations do not necessarily spell out financial ruin. With careful planning, a bit of self-sacrifice, and serious changes in your spending habits, getting back on your feet is usually possible.
However, all that being said, avoiding credit card debt in the first place is clearly the best option ‐‐ which is why we have put together a quick list of tips that can help you do exactly that:
- 1. Limit Number of Credit Cards. Having lots different credit cards makes spending easier and it makes losing track of your existing debts a real possibility. Even accidental late payments are more likely when you have too many cards. Last but not least, owning multiple cards at the same time may reflect unfavorably on your credit score, even if you don’t fall behind on payments.
- 2. Keep Cash Savings on Hand. A rainy day fund will significantly reduce the risk of a single financial misfortune sending you into debt. Though building such savings is not always easy, it is a fundamental pillar of true financial security.
- 3. Set up Payment Reminders. As we mentioned earlier, accidental late payments are a real phenomenon ‐‐ and they are especially frustrating given how avoidable they are. Thankfully, most credit card companies do offer options for payment reminders or even automatic payments, so take advantage of that.
- 4. Leave the Plastic At Home. If you don't plan on using your credit card, don't bring it. This can help control impulse spending and force you to think about your purchases a bit harder before pulling the trigger.
- 5. Don't Pay Credit Card Debt With Another Credit Card. Instead, educate yourself regarding effective options for reducing existing credit card debts.
For more advice and other financial tips, Visit Madison Monroe and Associates online today!