Credit cards can be a really useful thing to have, but without the proper forethought, using a card can easily lead into credit card debt before you realize. With credit cards being so easy to get these days there are some things you should really consider before you sign up for one, or before you start using them so you can remain as debt free as possible, and limit your credit card debt.
The first thing to remember when getting a credit card is that it is not free money! All the money you spend on the card will have to be paid back, usually at the end of the month, the leading cause of credit card debt is people forgetting that all of the money they spend on the card has to be paid back at some point, and that the longer you leave it, the more you end up paying back. When paying back a card if you don’t make payments and overspend – borrowing a couple of hundred pounds can end up with you paying double that back.
Also remember that unless you pay the money back as the bills come in they will charge you extra to pay it back which is how credit card debt starts. Not only is there the usual borrowing rate, which varies from card to card, but if you miss the payment on your card you will be charged, if you spend over the limit you will be charged, and if you miss a payment and get charged and that charge takes you over your credit limit you will be charged twice, all of this adds up to more credit card debt.
If you have money on your debit card, or you have the cash, avoid using your credit card wherever possible. Most stores now take debit as well as credit cards. Your usual debit card will not charge you for using your own money.
Do not use your card to get money of at ATM machines. Many of the credit cards on the market charge you to take money out of an ATM, the charge varies, but when you bear in mind you are going to be paying back the money with interest, you should avoid all the unnecessary extra charges you can in order to limit the risk of getting into credit card debt.
When going abroad. If you need to pay for things on a credit card – check the charges before you go. A lot of cards will charge you for overseas use. If possible covert money into currency and use that to pay, or even better convert it to traveler’s cheques which will also cover against loss or theft of the money.
Be careful before you get a credit card or start using one, getting into credit card debit is so easy to do without realizing, and so many people are affected by it. Using these tips should help you limit any extra credit card debt you might fall into.
