If you possess a credit card, you are always facing the risk of running up too much money on it. This can lead to considerable trouble in paying off the debts. Use your credit cards, but use them judiciously. Here are ways to avoid credit card debt.

  • Having an emergency fund: A lot of people run up too much money on their credit cards because they didn’t have an emergency fund to take care of things during a medical crisis or a car repair. If you have an emergency fund, you will never have to charge emergency expenses on your card and risk being in debt.
  • Use your credit card only to the extent you can afford: The main reason why so many people are facing huge credit card debts is because they used it to purchase things they just couldn’t afford. Rule of thumb: If you don’t have the cash for a certain item, don’t charge it.
  • Use balance transfer schemes judiciously: Don’t balance transfer just because you feel like it. Taking advantage of a lower rate of interest is good, but doing it too many times, on a lot of different credit cards, is only going to give your credit scores a dive.
  • Missing card payments a strict no-no: Make all card payments every month as soon as you receive your statement. This will ensure that you never ever run a balance and keep debt at bay. You will not have to worry about whether or not you can make the minimum payment required every month.
  • Don’t advance cash on your credit: Do this to avoid credit card debt. People who use their cards for availing cash are usually on their way to debt. Avoid them altogether. Instead, build an emergency fund and stick to a monthly budget.
  • Understand the terms of your credit card: Read the fine print and understand exactly what you are doing when you get a credit card. What the rate of interest is, what late fees will be charged, etc. are things you should understand.
  • Don’t hand over your credit card to anybody: When you do so, you have absolutely no control what that person is going to do with it. The person you are thinking of giving your credit card to is not getting one for himself from a credit card company for a reason.
  • Don’t get more credit cards than you need: Just because everyone has 10 ten credit cards does not mean that you need them too. Limit the number to avoid credit card debt.
  • Keep your eyes open: Always have your antennae on to know when you may be on the path of credit card debt.