How to Avoid Having a Mountain of Credit Card Debt

Pencil erasing credit card debt

Acquiring credit card debt, per se, isn’t bad. It helps you build a good credit history to put yourself in an excellent borrowing position when buying big-ticket purchases. Paying with plastic can be a sound budgeting strategy as your credit card provider can list your expenses for you.

But then again, credit cards are prone to misuse. In fact, recent statistics show that Americans are becoming more credit card debt-ridden by the year. The upside, however, is that credit scores are historically high too.

Although the average debt of sandlappers is below national standards, Palmetto Citizens Federal Credit Union notes that swiping your credit cards in Richland County responsibly matters to use them to best effect. Here are some practical tips:

Zero Out the Balance Monthly

Interest is the number one reason many Americans are trapped in a vicious cycle of debt. You can protect yourself from it by simply settling your full balance every month. Covering just the minimum balance regularly is bad practice because the subsequent bills will balloon with unpaid charges and interest.

Avoid Frivolous Purchases

Cash will always be king, and credit cards are an excellent second option. Don’t put your wants on plastic; rather, use your cards as a temporary loan to yourself to get by during emergencies.

Don’t Go over 30% of Credit Limit

If you must use your credit cards regularly, avoid maxing them out. Instead, consume only 30% of each to increase your chances of paying the bill in full monthly. When lenders would look at your credit history and see that you don’t over-rely on your cards, you’d be viewed as a responsible borrower.

Get from a Credit Union

Go to a cooperative, not a bank, when applying for credit cards. Credit unions collect fees, like traditional financial institutions, to make money, but they only do so serve their members. If you’d make a side-by-side comparison, you’d discover that cooperatives offer more competitive charges than banks do.

Strive to be a responsible credit card owner. If you have the discipline to use your cards wisely, they would never be a burden to you.