How to Avoid or Escape Credit Card Debt

Avoiding credit card debt

As we mentioned above, We recommend that if you get a credit card, you should plan to pay the full amount owed every month. That way you avoid the exorbitant interest rates the cards charge, and you also benefit from the grace period (which in effect enables you to borrow money for a few weeks for free).

In order to accomplish this, determine how much you're able to pay on your credit card bill each month and then stick to that limit. At the end of the month, pay the full amount, just as if it were any other bill, like rent or utilities.
Also, examine each monthly statement to make sure there are no inaccuracies or fraudulent activity, and report anything you find immediately.

If you usually pay the balance in full but are going to be late with one payment, call the credit card company and find out how much you will be charged as a penalty. Include that amount in your check, so that the fee doesn't appear as a balance on the following bill, which would eliminate the grace period and result in more interest charges.

If you expect to have difficulty paying off the bill every month, consider using a debit card (which draws from your bank account) or an American Express card (which doesn't allow you to carry a balance from one month to the next). Remember that if you owe money on your credit cards, you're really borrowing from your future earnings, which is a bad habit to get into.

Escaping credit card debt

If you already have credit card debt, you're not alone. The average U.S. family has a credit card balance of about $8000, meaning they pay more than $1000 a year on just the interest. But this is an expensive cycle to get into, and these folks would benefit greatly by working their way out of this debt as soon as possible. Debt isn't always a bad thing, but it can become a problem if not handled property. It isn't the end of the world, but it is important to resolve the situation as quickly as possible because doing nothing will almost always lead to more problems. Watch for these warning signs:If you do feel that the debt you have might be a problem, here are a few tips for improving the situation:
By InvestorGuide Staff

Copyrighted 2020. Content published with author's permission.

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