Self Control – The Main Way to Avoid Credit Card Debt
People can get into credit card debt for legitimate reasons. One is a medical problem that is charged to a card and the other is a home repair that needs to be done immediately. Most other reasons are inexcusable. A rule of thumb is that if you cannot pay off your credit card debt within 30-90 days, you have no business making that purchase. You simply cannot afford the item.
Check 0% interest rate offers carefully to see how long this teaser rate lasts. After the 0% period make sure that the following interest rates are not very high. Today many banks are raising their rates even for excellent clients.
An action that shows lack of self control in making purchases is to put a meal on a credit card. If you plan on paying that meal off within the next payment cycle, it might be acceptable. If this meal will be paid off in increments over the next year or so, you have made a mistake.
On big ticket items like TV’s and computers, if the item cannot be paid off within 3-4 months, the purchase should only have been made with cash. Companies that offer interest-free credit card purchases for a period of time are fine, as long as you pay the card off during that time and make the minimum monthly payment. If this is not done, all the interest will accrue and you will have a very large bill.
Be wary of high interest rate cards and try only to use those with rates below 10%. Paying with cash is the best ideal of all. Use cards sparingly and have a plan as to when the card will be paid off. If you see no clear end to the debt on a card, do not make the purchase.
