3 Simple Tips to Avoid the Credit Card Trap
Credit cards have become a way of life and these days most of us have a wallet full of them.
Although it offers a lot of convenience, it comes with an immense amount of responsibility - a responsibility that most people just don't have.
What you need to realize is that a credit card is in reality nothing more than a very expensive loan and unless you manage it very well, you may well find yourself in a serious financial fix before you know it.
Because credit has become such a loosely regulated thing bans, institutions and even stores are handing out cards as if its candy - enticing us to spend more.
Since the financial meltdown in 2008 things are changing but without your own self discipline there's no real solution Here are 3 very fundamental tips for proper money management with a credit card.
1.
Never Have More Than 1 Credit Card Although its tempting to take up every offer that comes your way, its something you need to be firm on.
When we need something it can be a great temptation to just buy it on credit and "worry about paying for it in the future".
The problem is that it will eventually come back to haunt you.
One card is more than enough and most people don't have the management skills to handle more than one card effectively anyway so don't do it.
2.
Pay Your Card off In Full Every Month Spending is the fun part.
Paying for it is horrible.
In fact, its so horrible that we tend to turn a blind eye to it until you wake up one day knee deep in debt.
The only way to use credit wisely is to pay off your cards in full every month.
It's the interest that's the real death trap and if you don't make full payments then chances are that you are paying a fortune in charges.
Like I said, you should treat it as a very expensive loan.
3.
Never Buy Luxuries on Credit Whether it's a flat screen TV or a new dress, the temptation to buy luxuries on credit is always there.
The fact that so many department stores now offer credit makes it easier than ever before to just "get it".
Anytime you don't have to open your wallet and take cash out, you are in danger of getting deeper in debt.
I would suggest that you start using cash only - or at lest just do it for a week so that you can become conscious of your spending.
Although it offers a lot of convenience, it comes with an immense amount of responsibility - a responsibility that most people just don't have.
What you need to realize is that a credit card is in reality nothing more than a very expensive loan and unless you manage it very well, you may well find yourself in a serious financial fix before you know it.
Because credit has become such a loosely regulated thing bans, institutions and even stores are handing out cards as if its candy - enticing us to spend more.
Since the financial meltdown in 2008 things are changing but without your own self discipline there's no real solution Here are 3 very fundamental tips for proper money management with a credit card.
1.
Never Have More Than 1 Credit Card Although its tempting to take up every offer that comes your way, its something you need to be firm on.
When we need something it can be a great temptation to just buy it on credit and "worry about paying for it in the future".
The problem is that it will eventually come back to haunt you.
One card is more than enough and most people don't have the management skills to handle more than one card effectively anyway so don't do it.
2.
Pay Your Card off In Full Every Month Spending is the fun part.
Paying for it is horrible.
In fact, its so horrible that we tend to turn a blind eye to it until you wake up one day knee deep in debt.
The only way to use credit wisely is to pay off your cards in full every month.
It's the interest that's the real death trap and if you don't make full payments then chances are that you are paying a fortune in charges.
Like I said, you should treat it as a very expensive loan.
3.
Never Buy Luxuries on Credit Whether it's a flat screen TV or a new dress, the temptation to buy luxuries on credit is always there.
The fact that so many department stores now offer credit makes it easier than ever before to just "get it".
Anytime you don't have to open your wallet and take cash out, you are in danger of getting deeper in debt.
I would suggest that you start using cash only - or at lest just do it for a week so that you can become conscious of your spending.
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