While the thought of being able to buy something right now that you can’t actually afford with cash is very enticing, getting stuck in this frame of mind can quickly lead you to getting very deep in debt. So although you might like the fact that you can acquire credit cards or other lines of credit and get the things you want or need, it’s important that you be very careful with them so you don’t wind up getting in financial trouble. To help with this, here are three tips for using credit cards without going deep into debt.
Pay Off Your Balance Each Month
One great way to ensure that you never get in over your head when it comes to using credit is to pay off your balance each month. According to Latoya Irby, a contributor to The Balance, paying off your credit card balance in full each month is a great way to keep from adding to your credit card debt each month as well as will eliminate the chance of you paying high interest rates. Additionally, by keeping your running balance at zero by the end of each month, you will be working to build your credit score as well, which will make it easier for you to get more credit when you need it.
Take Advantage Of APR Promotions
A big way that credit card companies can make money off you is by you keeping a balance on your credit card and needing to take a long time to pay that balance off. And while ideally, you’d be able to pay everything off in just one month, like was mentioned above, that’s just not possible sometimes. In situations such as this, Lindsay Konsko, a contributor to NerdWallet, recommends that you try to take advantage of APR promotions that might be running with certain credit cards. By using one of these promotions in conjunction with you making a large purchase on your credit card, you might be able to get a 0% APR for a few months, which could give you the time you need to pay down your balance without getting further and further into debt as a result of interest charges.
Keep Track Of What You’re Spending
Just like with your bank accounts, Kimberly Palmer, a contributor to U.S. News and World Report, shares that you should always be keeping track of what you’re spending on your credit card if you want to have any control over it. By tracking your spending and see where your money is going, or where your credit is taking your money, you’ll be able to freeze your spending before it gets too out of hand and learn areas where you can and should start scaling back for the sake of your financial future.
To help keep yourself out of credit card debt, consider using the tips mentioned above to learn the smartest ways to use credit cards.