5/28 | How to Use Credit Cards and Stay Out of Debt
Avoid seeing everything as an emergency
One of the biggest problems with credit cards is even those who promise to only use them for emergencies tend to see everything as an emergency. With so many companies failing today and personal bankruptcies on the increase it’s essential for each person to be able to identify a true emergency—anything else requires the use of cash and not time payments. In fact, one reason so many people are suffering from financial crisis today is because they allowed themselves to be taken in by these pieces of plastic. Their ideals were good initially, to pay off the bill when it arrived in the mail. Had every person who made that promise kept it we would not be faced with the number of personal bankruptcies that are in existence today.
Learn to define an emergency
When you think back to the day when you received that first plastic card in the mail you will probably laugh at yourself. After all, it was definitely an emergency to buy that new dress or handbag just because they were on sale! Never mind that if you had to pay cash you would never have given it a second thought because it was way more expensive than anything you had ever bought in the past. You failed to teach yourself that an emergency meant a broken down car, heater, medical expense or other major expense that could not wait until payday and/or was too expense to take from the ordinary budget. Although this might include plane tickets to visit a sick or dying relative it does not include plane tickets to take a vacation!
Exercise self-control
One of the first things people need to learn when they are in possession of credit cards is to exercise self-control. I believe women are more prone to this than men, although many men are taken in by a new girlfriend and want to impress her with big spending habits. Also, a man who has been living without certain things may feel he “owes it” to himself to treat himself and/or his wife or girlfriend because he can now “afford” to spend some extra cash. It is not always a woman who is guilty of being an excessive spender. Women tend to spend on themselves while men have a tendency to spend to impress, usually a woman though it may also be to impress a friend, relative or co-worker.
Learn to live within your means
Learning to live within the scope of your paycheck is one of the hardest things for anyone to do. It seems when a person has credit cards they want to spend more than they earn and then wonder why they can’t make the payments. The debt can leave you paying for many years even if you stop charging on them, especially if you make only the minimum payments. If you can’t afford to pay the bill when it comes in and it’s not an emergency, use your checking account instead. It doesn’t cost you anything and you won’t go into debt if you use your debit card to pay for dinner instead of charging it.