Debt and the Use of Credit Cards
Like most people, I am confident that you get lots of junk mail with lots of applications wanting you to take out credit cards from companies like Visa, Mastercard, and American Express.
About every week I get at least one offer and some already have information completed on the applications.
Keep in mind that credit card debt in this country is on the rise.
The offers may seem to have low interest rates, but carrying another credit card does not help avoid debt.
In fact it makes it easy to rationalize making purchases that are beyond your budget.
When you are thinking about accepting some of these offers, be clever about making your decisions.
Are you going to pay the bill every month in full? If so, the interest rate does not matter.
If not, determine a schedule of payments to get the debt paid as quickly as possible.
Incentives and rebates are very tempting on the credit card offers, but will they benefit you? If you have to overspend to meet the requirements for the rebate or incentive you will not be able to take advantage of them.
If you can make the regular purchases you have already budgeted for AND meet the requirements then it may be a good option for you.
One of the best financial decisions is to use a credit card for small purchases you are going to make anyway then pay it off monthly.
For example, some will use it for groceries up to the amount budgeted and pay the bill when they get it.
This method of credit card use keeps from accruing debt builds a good solid credit rating.
If you already are in debt, it is not prudent to add to that by creating more credit accounts or transferring balances from one account to another.
Set monthly repayment goals and stick to them to get rid of your debt instead of adding to it.
Look at the luxury things you purchase and apply that money to the debt.
For example, if you use what you spend for 1 latte each week and have only 4 instead of 5; you are finding a way to get out of debt sooner.
To avoid piling up more debt, it is helpful to make a simple spreadsheet to list all your debt and track it as you pay it off.
This helps you see where the money is going, the progress you have made and makes you decide not to make purchases that will add to the debt.
Reward yourself when you have repaid the debt with something that does not cost money.
Take a walk with your spouse, borrow a DVD from the library to watch or find other things you enjoy that do not require money.
This will help you live a debt free life.
If you decide to make a large purchase with your credit card, determine how much you will pay back a month and make the commitment to do it.
By using credit in a thoughtful way, you can keep debt free.
Money is valuable and to get the best use of it, you need to use credit wisely.
About every week I get at least one offer and some already have information completed on the applications.
Keep in mind that credit card debt in this country is on the rise.
The offers may seem to have low interest rates, but carrying another credit card does not help avoid debt.
In fact it makes it easy to rationalize making purchases that are beyond your budget.
When you are thinking about accepting some of these offers, be clever about making your decisions.
Are you going to pay the bill every month in full? If so, the interest rate does not matter.
If not, determine a schedule of payments to get the debt paid as quickly as possible.
Incentives and rebates are very tempting on the credit card offers, but will they benefit you? If you have to overspend to meet the requirements for the rebate or incentive you will not be able to take advantage of them.
If you can make the regular purchases you have already budgeted for AND meet the requirements then it may be a good option for you.
One of the best financial decisions is to use a credit card for small purchases you are going to make anyway then pay it off monthly.
For example, some will use it for groceries up to the amount budgeted and pay the bill when they get it.
This method of credit card use keeps from accruing debt builds a good solid credit rating.
If you already are in debt, it is not prudent to add to that by creating more credit accounts or transferring balances from one account to another.
Set monthly repayment goals and stick to them to get rid of your debt instead of adding to it.
Look at the luxury things you purchase and apply that money to the debt.
For example, if you use what you spend for 1 latte each week and have only 4 instead of 5; you are finding a way to get out of debt sooner.
To avoid piling up more debt, it is helpful to make a simple spreadsheet to list all your debt and track it as you pay it off.
This helps you see where the money is going, the progress you have made and makes you decide not to make purchases that will add to the debt.
Reward yourself when you have repaid the debt with something that does not cost money.
Take a walk with your spouse, borrow a DVD from the library to watch or find other things you enjoy that do not require money.
This will help you live a debt free life.
If you decide to make a large purchase with your credit card, determine how much you will pay back a month and make the commitment to do it.
By using credit in a thoughtful way, you can keep debt free.
Money is valuable and to get the best use of it, you need to use credit wisely.
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