When a credit card gets into the wrong hands, it can be very dangerous. It's not about thieves or con artists, but they're also a threat. But an irresponsible spender with a credit card can do damage that can't be fixed. This can lead to a lot of debt and make it hard to get out of it.
Having a credit card is a big responsibility, but it can also be a big temptation for people who don't budget their money and spend it on whatever they want. But, of course, not everyone is the same. There are a lot of people who have been able to keep their credit in good shape. It's actually very easy, and if you take a few precautions, you too can enjoy the perks of credit cards without getting into a huge amount of debt.
Always pay your bills on time. Even if all you can afford is the smallest payment allowed, make it. This will get rid of the extra fees for payments that aren't made on time. Also, the amount you owe the credit card company will go down, and every little bit helps. Also, if you keep missing payments, you'll keep adding to your debts, which will lead to your credit line being cut.
Spend as little as possible. When you use your credit card, you add more debt to your account. Since the store you bought from will be paid for by your credit card company, you will always have debts when you use your card. Remember not to spend too much. Having a credit card is not a pass to go crazy. Don't ask for more than you can afford to pay. A credit card is just a way to make sure you don't have to carry cash.
Write down when your deals and promotions end. For example, let's say you got your new card because it had a low interest rate. These low interest rates will only last for a few months. So, when the deal is almost over, you can expect the interest rates to go through the roof. This means that even a small debt can grow into a big one over time. So, try to pay off all of your credit card debts before the deal or promo ends.
Don't use too many credit cards at once. Only two or three should be on your list. So, you won't be brave enough or tempted to spend more than you can pay back. If you know you have a credit line, it's easy to just keep spending and spending.
Stop your debts from getting bigger and bigger. If you have a big credit card debt, try to move the balance to another card with a lower interest rate. You can slow its growth this way. Set your payments in order of importance. Pay off the debts with the highest interest rates first.
Tighten your belt. Give up some nice things and make some sacrifices. This might only be for now, until you pay off all your debts. If you don't listen to them, you might have to give up all your nice things for good.
So remember to take some of these precautions, and you'll be able to enjoy all the benefits of having a credit card without getting into a lot of debt.
