The easiest way to get out of debt is to never get in to it in the first place. There are several measures you can take to use your credit cards wisely and avoid the hassle and stress of mounting credit card debt.
The best way to use a credit card is to pay off the balance monthly. If you do this, you will avoid the monthly finance charges and interest. It won't even matter what the interest rate is on the card if you never pay it. By doing this, you can be building your credit while avoiding paying any more than you would if you were paying for those purchases in cash.
Another tip to using credit cards wisely is to always pay on time. If you start to fall behind on your payments, your future minimum payments will only be that much larger. One easy way to make sure you pay on time is to pay as soon as you have the money for the payment. Not only will paying late cost you money, it will also hurt your credit.
Don't have too many cards. There's no need to fill out every application you receive in the mail or to have a store card from every store you frequent. One or two credit cards is plenty. If you have more cards, consider closing one or two that have higher interest or carry fewer benefits.
You'll want to understand how your card works. Even if the interest rate is irrelevant to you because you pay off your balance each month, know what it is. Know if there is a "universal default clause" that can automatically increase your interest to the high default if you make any of a number of mistakes. You'll also want to be leery of any added offers such as credit protection or insurance. These things are unnecessary and expensive.
Don't charge up your credit cards, but keep your balance under 1/3 of your available credit. If you charge up more, it will reflect negatively on you on your credit report. Instead of applying for more credit when you reach this point, work on using your credit cards less.
Once you have a credit card it can be tempting to spend it on items you don't need and can't afford. Instead, work on putting off the purchase until you have saved up the money to buy it. This will allow you to pay less for the product overall and enjoy it more knowing that you bought with money you earned not borrowed.
If you follow these simple tips when using your credit card, you can find that they are beneficial not harmful. If you have started these practices too late and have mounting credit card debt, talk to a reputable credit counselor about what options are available for you. It is possible to get back on track after having credit problems, but this is the harder route. It's never too late to learn to use credit cards wisely.
