At Credit Card pundit we believe that credit cards can be great tools when used wisely. But we also know that they can lead to a lot of stress when used to buy things you can’t really afford.
Like almost everything, credit cards can be a blessing or a curse. A credit card can save you in a pinch, providing needed financing when your cash flow won’t cover a surprise expense. But relying on a credit card too often for everyday needs can turn a precarious financial situation into a dire crisis.
If you have trouble paying off your monthly credit card balance, and are carrying a debt over from month to month, here are some steps you can take to lessen your dependence.
1. Don’t carry your credit cards on your person.
It is easier to spend money you don’t really need to spend if you have the card on you. Impulse purchases are easier to talk yourself into when the card is readily available. But if you have to drive home to get the card, then return to the place of purchase, you have more of an opportunity to decide if the purchase is essential and worth the interest.
2. Do not use credit cards to pay your monthly bills.
If you don’t have the money to pay your monthly bills, you end up paying more money for the bill due to interest than if you had paid it directly. You will also increase the balance on your credit card which in turn increases your monthly payment. If your cash flow was tight before you paid the bill(s) with the credit card, you will further limit your available money with higher required minimum payments.
3. Always pay more than the minimum payment each month.
Your minimum payment will pay down the interest. But the principal doesn’t budge. If you only pay your minimum payment each month, you will never get out from under your credit card debt.
4. Do not use the cash advance option on your card.
Unless there is an emergency, do not use your credit cards for extra cash. The credit card companies usually charge fees for this benefit and make you pay interest on the cash, too.
5. Reserve your credit card for emergencies or large, necessary purchases.
If you are carrying too much debt, credit cards should not be used for trivial or pleasure purchases that you can’t really afford. If you are concerned with keeping yourself out of debt and bettering your financial picture, credit card purchases will not help you attain your goal.