Abandon Nest

Credit card debt can be a killer financial burden. You pay interest if you carry a balance from month to month. If you miss a payment, you’re hit with a late fee (which is basically throwing money away.) Finally, if you start to fall behind and near the upper boundary of your credit line, your credit score will start to drop. This makes it harder to get the best interest rates on loans and credit in the future. So how do you avoid all these things? Follow my three top tips for avoiding credit card debt, and you should be fine. Here goes:

1. Don’t spend more than you make - This may seem completely obvious to most people, but I know of some individuals that consistently rack up credit card bills that they can’t pay with their current income. I don’t know why they do this, but it’s not a very good practice. Keep track of your receipts and monitor your credit card balance so you know how much you’ve spent during the month. At the end of the month, you should have enough to pay your credit card bill completely.
2. Use credit for things you need, not things you want - I find the best way to do this is to stop and ask yourself, “Do I really need [blank]?” If the blank is something like groceries, then the answer is probably yes. If you find yourself filling the blank with Sony Grand Wega Plasma TV, then I would say your credit card needs to stay in your wallet.
3. Don’t use your credit card at all - Now this may not be very popular with some people, but I find it works for me. My credit card is a backup. It sits in a drawer in my kitchen unless I plan on going out of town or have a major emergency to take care of. If I don’t carry my credit card with me, I can’t use it on a whim or for something I don’t need. See how simple that is?

Obviously these three things won’t work for everyone, so what other suggestions do you have for responsible credit card use?

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