According to an Entrepreneurng report, it is possible to have manageable or crippling credit card debt. People who manage to accumulate thousands or tens of thousands of dollars in debt are responsible for both the principal balance as well as additional costs such as late fees and increased interest rates. Even worse, for some people, believing that they will never be able to pay it off or even ignore it because they don’t want to confront it, can become much simpler.
Here are five simple rules to keep off debt:
1. PAY IT OFF COMPLETELY EACH MONTH
Some people are capable of appropriately carrying a balance and feel at ease doing so. However, some aren’t.
Paying off the entire sum on your credit card each month is the greatest approach to avoiding debt. Keeping your credit utilization around 10% is a decent rule of thumb to follow, even if 30% is the exact maximum, so this shouldn’t be too challenging.
2. NEVER SPEND MORE THAN YOU CAN AFFORD
Credit cards are often seen as free money by those who are new to using them. The truth? Simply put, a credit card is a loan. Whatever you spent, you have to pay back the following month. Spending too much can force you to make large payments all at once.
If you are unable to, you begin to accrue debt, which continues to grow every month that you fail to pay it off.
3. IF YOU DO END UP IN DEBT, CREATE A PLAN OF ACTION
You must take quick action to eliminate any debt you may have. This entails sitting down, developing a new budget with space for debt repayment, coming up with a plan to assist you in paying off debt right away and setting up additional goals and milestones to make the process as stress-free for you as possible.
4. DO NOT PLAY ALL OF YOUR CARDS
The worst thing you can do is max up your cards. Not only would it harm your credit, but people with higher credit limits may find themselves responsible for the astronomical debt. If you have many cards, you will have even more debt to pay off quickly.
This is related to the advice to never spend more money than you have, but it serves as a reminder that maxing up your credit cards has more effects than only negative effects on your finances.
5. STOP SAVING CARDS IN APPS
Many apps enable you to save payment information, which makes shopping more convenient for you. But this is how people with shopping addictions wind up spending ever-increasing amounts of money and getting into debt.
Delete any apps where you’ve saved card information if you do. Delete your card and any digital copies you may have stored on your phone.
In conclusion, to continue managing other aspects of your life, you should find strategies to increase your income. The sooner you start paying off your debt, the better.
