Do you own a credit card? If you do, you are not alone. A large number of Americans have a credit card; in fact, many even have more than one credit card. Regardless of how many credit cards you have, do know how to properly use them? Unfortunately, a large number of Americans do not. The improper use of credit cards is the most common cause of credit card debt. To prevent yourself from falling victim to credit card debt, you are advised to familiarize yourself with proper ways to use a credit card.
Perhaps, the most important thing to remember about credit cards is that they should be treated as a loan. When you go to the bank, to request a loan, you are required to pay that loan back, in a specific period of time. The same goes for credit cards, only the repayment time is much shorter. That is why it is important that you only make purchases that you can afford to repay. If you do not expect to be able to pay for your credit card purchases, in the required amount of time, you are advised not to make those purchases.
In addition to your spending habits, it is also important to examine how you make the payments on your credit card balance. Many Americans only pay the minimum balance. While this is enough to keep your account in good standing, you are encouraged to pay more, even if it is only once in a while. Paying more than the minimum balance, whenever you get the chance to do so, will help to reduce the amount of money that you owe in interest. In addition to paying extra whenever you can, you are also encouraged to pay as much or as little as you can. It may seem silly to only pay an additional five dollars, but overtime that five dollars could add up.
It is also important to make sure that you make your payments on time. Late payments are one of the most common causes of credit card debt. Unfortunately, when you miss a payment, your minimum balance tends to skyrocket. Many times, that balance becomes too much to afford. When you cannot pay the minimum balance on your credit card bill, you will begin to accumulate credit card debt. That is why it is extremely important to make sure that you are able to pay your credit card bills on time.
By keeping the above mentioned points in mind, you should be able to keep yourself out of debt, at least with credit cards. When it comes to credit cards, you just need to use your common sense. In most cases, thinking before you swipe your card is enough to keep you debt free.