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Credit card debt: How financially-savvy people avoid that

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By: Phil Bradford
on 23rd Dec,2015

To become financially-savvy you expert guidance. For that you needn’t look any further, just glance through these most effective list of money-saving
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You needn’t cut up your credit cards just to get a zero balance every month. If you’re so hell-bent on doing so, then here some highly effective money habits of people who’ve never been under credit card debt.

Smart credit cards usage tips

  • Raise emergency as well as vacation fund - Philadelphia based Federal Credit Union’s financial educator, Erin Ellis said that people with no credit card debt have emergency funds readily available and never do they depend on their cards to pay for any kind of emergencies. These financially-savvy people have a strong penchant to save as much money as possible.
  • What’s more interesting is that they use cash to resolve their problems and not plastics, thereby controlling the situation from taking an uglier turn. Besides, they keep a savings fund to cover their leisurely activities like vacations and holidays. Sadly, the same couldn’t be found in those people who’ve got themselves trapped into credit card debt. They use their plastics for every sundry item, instead of cash or debit. Hence, credit card debt can be avoided provided you’re willing to use more of cash and less of the plastic money.

  • Shun all sorts of rewards trap - It’s tempting to flash your credit cards at the drop of a hat for every purchase to collect as many rewards points as possible. You might bite off more than you can chew. In other words, you could end overspending and thus, you continue adding excessive amount of outstanding balance to your credit accounts by the end of every month.
  • For example, if you’re getting a cash back of 1% while you’re made to pay 15% towards your outstanding balance, then whatever the rewards points be, you’ll end up losing far more money than you thought you’ve saved. The matter will turn worse, if you don’t pay off your balances in full every month. However, money smart people never fall into the lure of rewards points provided by the creditors.

  • Leave the plastics at home - If you plan to spend a certain $35 on dinner, then carry an amount of cash that would cover your dinner expenses, besides conveyance along with other essentials. But, if you carry your credit cards with you, then it’s very likely that you’ll include add-ons to your main course like appetizers, extra glasses of wine, carbonated drinks, etc. The same wouldn’t happen if you are to carry cash.
  • Be it a dine out or a shopping spree, when pay in cash, you’ll feel the pinch and this feeling would make you reluctant not to part with your hard earned dollars easily. Moreover, when you run out of cash and spend time looking for an ATM nearby you’d keep playing in your subconscious mind whether to spend on a particular item or not.

  • Spend as per means - People who carry credit card debt live beyond their means, Woroch says, if you’re among those who live beyond their means, then a ticking financial time bomb could potentially devastate both your personal as well as professional life.
  • You need to stop enacting antics to keep-up-with-the-joneses. Learn take control of your expenses and deal with practical intelligence as far as your money is concerned. Assess your lifestyle, your monthly household costs, and of course your income. To do that you may use some of the best online money-saving and budgeting apps available for free.

  • Make regular weekly payments - Make sure you’re on top of your monthly financial obligations before your lose control over them. To achieve this you’ll have to make small payments regularly. Payments in small packets would appear more soothing and weigh lighter on your pocket, thus helping you keep your credit accounts manageable and in the black.
  • Always shop with a list - Apart from the above causes for credit card debt, impulsive shopping or rather reckless spending is one of the major ones. If you’re tempted to purchase something you never planned to, then walk away from the item.
  • Finish your shopping and spend time buying other items, very soon you’ll overcome the urge to purchase that unnecessary item and thus, you may save a good amount of the greenbacks. However, if the thought of buying that same item lingers through your mind, then go home and think whether or not it's essential for your life. If not, then let it pass.

  • Make it hard to lay your hands on credit cards - This is an extreme habit, but may be ideal for those who have had credit card issues in the past, yet don't want to get rid of their card for emergency purposes. Always keep your credit cards away from. Place in such a place where you won't be able to reach out easily. Try to condition your mind in such a way so as to use credit cards only during emergencies.
  • Always keep checking your credit reports at regular intervals to weed out any kind of tradelines that could drop your credit scores. Moreover, going through your credit reports will ensure that no kind of identity theft or fraudulent transaction has happened in your accounts.

Read more: 4 Secret tips to reduce credit card debt - Defeat your worst enemy

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