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How to use your credit card without getting into debt

by , 20 October 2014

Credit cards can be your friends in times of need, but they can also turn into your worst enemies if you're not careful.

In a society that is addicted to consumption, it's quite easy to get buried in consumer debt due to overuse of credit cards. That's why it's so important to understand how to use credit cards wisely, in order to avoid getting into debt.

As convenient as they are, credit cards can also be the source of stress and debt troubles.  Learning how to manage your credit card accounts and avoid debt can keep you sane during tough economic times.
 
Here are a few tips to get you started.
 
1.  Don’t max out your credit cards
 
Keep your credit card balances low to avoid low credit scores. Pay down high balances and avoid making only minimum payments. The sooner you can pay off your balances, the lower your debt will be. In general, try not to use more 30% of the available credit.
 
2. Don’t open or close accounts without a good reason
 
Closing accounts you rarely use may seem like a good idea, but it’s really not. If the account is already open, it’s better to keep it that way in order to avoid damaging your credit score. For the same reason you should think well before opening a new account – don’t apply for credit you don’t actually need. Stick to two or three credit cards max.
 
3. Compare fees and rewards and read the terms carefully
 
Don’t make the mistake of choosing a credit card before reading all the terms carefully and checking out the hidden fees. If you can, compare cards to see which one offers you the best deal, in terms of interest fees and rewards. Look for cards that offer cash rewards.

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4. Don’t use your credit card for daily purchases
 
You shouldn’t buy things you need on a daily basis or clothing and gas using your credit card. This habit can send you spiralling into debt before you even realize it. Use cash or debit cards for daily purchases and keep your credit card usage to a minimum.
 
Also, make sure you always stick to what you can afford. Don’t buy things you can’t afford using your credit card just because you want to keep up with the Joneses.


How to use your credit card without getting into debt
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