Credit cards can become a very dangerous tool when it comes to spending money without limits, here's how to pay them without losing your mind!
Having a credit card can save you of very tricky circumstances, just by swiping it you can pay, buy or acquire something within seconds, but at the same time, this magical tool can transform into major debt when we find ourselves down the rabbit hole, forgetting when we should stop using it, which normally happens only when we realize how much money we owe to the bank.
According to a study from the financial data website ValuePenguin, more than 40% of American households carry a credit card balance, with an average balance of more than $9,000. Acquiring credit is absolutely necessary by today's standards, but when it comes to interests it gets gruesome and is no longer fun.
Perhaps a credit card isn't for everyone, especially if that means exposing yourself to financial risk, that's why if you're reading this, you should look at the reasons that justify acquiring one. At the end of the day, you will be better off without debts piling under your door every month. These are the cases when getting a credit card is okay:
- You don’t have any debt outside of a mortgage or student loan.
- You have an emergency fund with three to six months of expenses saved.
- You can pay off your balance in full every month.
Now here are more specific things to avoid when it comes to paying your credit card debt:
Asking for a loan
If you think that in order to sustain your credit card payments and the accumulated debt, the easier way is to ask for a loan you're very mistaken. Going to the bank and asking for money is not okay when you know that once you get it, you have more debt to pay. Stop escaping from coming clean and try to finish your debts without getting more in the way.
Not getting help
We all need help from time to time and there's nothing more beneficial to your pocket than to know when to ask for it. A credit counselor can review your financial situation and make recommendations to improve it. Depending on your situation, they might help you organize your credit accounts, obtain a credit report, develop a budget or even help you set up a plan to pay off your debt.
Forgetting about interests!
Sometimes in order to be able to spend more, we delay our credit card payments and don't pay them on time. So for example, if we bought a product for $100 once we go to pay it after the initial due date that price isn't going to be the same it would have grown all thanks to interests.
It might only be a few dollars, but if you don’t pay the residual interest — which could easily happen if you think that the balance is paid in full so you ignore the next statement — that amount will continue to accrue interest.