How To Stay Out of Credit Card Debt

Credit card debt sucks, and that’s putting it mildly. If you’re already in the hole that is credit debt, your options, unfortunately are a bit limited. If you aren’t at that point yet though, there are measures you should definitely be taking to keep things that way.

 

Tip #1

To start with, it’s important to realize that when used responsibly, credit cards are actually an important tool for getting ahead. You’ll need great credit to get that new house or car, and a credit card is a good way to establish that good credit. That’s why it’s important that you pay all of your credit card payments on time and if possible, in full. Yes, you can elect to pay the minimum payment and pay interest on the rest of the balance over time, but that’s simply not ideal given the average interest rate of a credit card. Plus missed payments, late payments, and high balances can hurt your credit score.

 

Tip #2

Shop around for the best introductory offers. Credit card companies want your business, and have tons of competition for it. As a result, many cards offer 0% or low aprs for the first several months after you open the account, or even cashback bonuses after you spend a certain amount of money with the card.

Tip #3

Most cards offer cashback, points, skymiles, or other rewards for each dollar you spend on your credit card. Make sure to take full advantage of this. Furthermore, some cards reward different purchase categories with higher cashback rates. Keep this in mind when deciding which card to put certain purchases on.

 

Tip #4

Most credit cards offer free monthly credit reports. Even if yours doesn’t, it’s a good idea to regularly check your credit report, which you can do for free from each of the 3 major credit bureaus every year. Unlike a debit card, which pulls your money out from your bank account, credit cards are borrowed money. If you don’t check your credit report regularly, you may not notice any fraudulent credit activity until it’s too late.