If you still aren’t aware then let us tell you that there is a possibility of Federal Reserve interest hike and if you are carrying a lot of balances on your cards then it can turn out to be a very costly habit—if at all, the interest rate rises. As per the Federal Reserve Data, the total amount of debt stood at $901 billion in the month of May—a sharp (3.19%) increase from the previous year. Unfortunately, it has been found that consumers are shopping more on their credit cards and not paying off bills on a monthly basis. Needless to mention, this can turn out to be a very costly fiscal habit if the interest rates are really raised.
There are borrowers who rely on credit card relief programs in order to bail themselves out of their debt woes. However, the question of applying for these programs only arises once you are into heavy financial debts. How about acquainting yourself with a few quick tips to avoid debts at the first place? Here is a rundown! Do read on!
How to avoid credit card debts
If you are using your credit cards unwisely then this practice can actually lead to a mountain of debts. A glimpse of the aforementioned statistics might already have given you an idea about the same. So, let us go through the wide array of effective tips aimed at helping borrowers avoid uncontrollable credit card debts.
Use your credit cards but stick to a budget
This is the best way to keep your credit card spending in check. How many credit cards do you have? What are the credit limits on those cards? Make sure you are bringing each and every credit card of yours within the framework of the budget. If you are not able to spend within the budget then do not carry the credit cards at the first place.
Do not let your balances pile up
The credit card can turn out to be a very effective way of paying bills while shopping—but only if you are actually paying off balance every month. However, if you choose to pay off only 2-3% of the total balances every month, then you are bound to see your debts escalating out of control. Our advice for you would be to treat your card as convenient means of paying for the items and not as a high interest loan.
Do not make the mistake of treating of credit cards to sponsor exorbitant lifestyle
It is very important for you to understand that your credit cards are not your passport to an exorbitant lifestyle. Do not buy anything with the cards which you couldn’t have bought if you were carrying cash instead of the card with yourself.
Hopefully, the points mentioned above will help you stay out of debts. Start working on these tips from today if you aren’t doing it already. Don’t wait for your credit card bills to spiral out of control. Act now, without delay!