Anyone who has experienced credit card debt will know just how easy it can be to rack up a large debt in a short period of time, and how long it can take and how difficult it can be to clear that debt. Following are some do's and dont's to keep in mind when using your credit card. The info may come a little late if you already have a large debt, but implementing these tips along with those on my other posts will result in your credit car debt being eliminated faster.
Credit Card Debt Do's
You may want those new shoes or golf clubs, but do you really need them - - - even if they are on sale? When we really want something we can convince ourselves we “need” it. While credit cards are great when used wisely, they also mean we can make impulse purchases we later regret. Ask yourself if you really need the item you have in mind, or just want it. Allow yourself a 24 or 48 hours “cooling off” period to think this through. The item will more than likely still be there if you really do need it. If it isn't, you've managed just fine without it until now and will continue to do so.
Keep spending within 30% of your credit card's limit. Maintaining a lower balance will mean your credit score will be in good standing and your debt will be easier to manage.
If you know you won't be able to meet your payment, phone your creditor and explain the situation. You may be able to have any late fees waived or even negotiate a new payment plan that will be easier for you to meet.
Credit Card Debt Dont's
Don't put everything you buy on credit. Pay cash or use a debit card for everyday items such as food, gas and clothing. Viewing your credit card as a cash substitute will see you in deep debt faster than just about anything else. Five dollars here and twenty dollars there may not seem like a lot, but it will quickly add up.
If your best friend asks you to go shopping to help her buy a new outfit and you know you'll be tempted to buy something yourself by all means go, but don't take your credit card with you. Leaving your credit card at home out of harm's way will mean you can still enjoy your friend's company and shopping vicariously. While this may not seem as fun as the real thing at the time, when your credit card bill arrives you'll be glad you behaved responsibly.
Don't use your credit card to buy items you can't afford. There are times you may need to put an expensive item on your credit card, say when your refrigerator packs it in. But do you really need the model that comes with a built in computer screen? Look for a basic model and buy it on an interest free repayment plan. Better still, ask family or friends if they have a fridge they don't use or try a second hand store or eBay. There may be time for that top of the line model later, when you can afford it.
Don't close out a credit card before finding out the effect doing so will have on your credit score. Sometimes closing a card can impact credit score negatively, particularly if the card is one that makes up a large part of your credit history.
