3 Surefire Techniques to Avoid Getting Into Credit Card Debt

by Christy Bieber | Published on Aug. 23, 2021

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These techniques could help you avoid the high interest charges credit cards are famous for.

Using a credit card can be a good way to earn rewards and build credit. But, whenever possible, it's important not to carry a balance on your credit card. That's because the interest rate on most cards can be very high, so your purchases will become costlier and your card could be hard to pay off in the future.

Sometimes, life circumstances make it really difficult to avoid borrowing too much on your credit cards. But there are techniques you could use to significantly reduce the chances you'll end up in credit card debt. Here are three surefire ways to avoid ending up carrying a balance.

1. Live on a budget

If you live on a strict budget and allocate your spending so you don't exceed your income, you're much less likely to end up in credit card debt. Your budgeting method can make sure you're capping your spending to what you can afford and you won't be tempted to reach for the cards to finance purchases that are above your means.

Living on a budget also enables you to prioritize saving up an emergency fund. Emergency funds are key to staying out of credit card debt since you can pull money from them when unexpected expenses occur rather than having to stick the costs on your cards.

2. Track your credit card spending

Once you have a budget and you know what your spending limits are, it's important to make sure you're staying within them. To do this, track the spending you're doing on your credit card (as well as the spending you do from your bank account).

If you keep track of your expenditures, you can make certain that you are sticking to your budget and not going overboard charging a bunch of stuff you won't be able to afford to pay for in full.

You can track spending by signing into your online credit card account every few days to see where your balance is. You can also use budgeting apps that import the purchases from your cards and categorize them automatically for you so you can make sure you're not just sticking to your overall budget but also staying within the spending limits you set for specific kinds of purchases.

3. Automate your payments

Finally, you should set up automatic payments from your bank account to make sure you're repaying your credit card balance in full when the statement is due. This ensures you don't carry a balance that could lead to getting hit with interest charges.

If you do this, obviously you need to make sure you have enough money in your bank account so you don't overdraft it and get hit with fees. But as long as you've been tracking your credit card spending and sticking within your budget, this shouldn't be a problem.

Following these three steps can help you to avoid owing interest charges to your creditors. That way, you can benefit from all of the advantages of card use without incurring the interest costs that could be damaging to your personal finances.

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