5 Top Ways to Fall Into Credit Card Debt

The  invention of plastic money has contributed to making life easier,  because people do not need to carry huge cash bags when doing payments  for large amounts of money and, naturally, credit cards can also  facilitate all kinds of commercial transactions. Your credit card is  often your “best friend” to pay for just about everything when your  balance allows it, however it could also be your worst enemy if you are not aware of the hidden, dark side that makes credit cards a debt  nightmare.

Avoid Applying for Too Many

 Getting your first credit card is often an exciting challenge because  of the potential risk to get your application declined. Sometimes even  people with a good credit history might not be approved due to having  other outstanding debt that might be a risk factor for the credit card  issuer, even if repayments are up to date. However, once the first  credit card is approved, it could be easier to get additional credit  cards that you had better avoid to get because they can dramatically  increase the global monthly interests that you have to repay for all of  them at the risk to fall into credit card debt.

Avoid Cash Advances

Some credit cards are promoted as the best next idea on earth that  allows you to withdraw cash from it using an ATM, what a convenient  feature… but for the issuers! Cash that you borrow from your own  credit card is truly pricey because it accrues extra, and higher,  interest rates over the interests that you are already paying for the  card, so this is another debt trap that must be avoided.

Avoid the Minimum Payment

Another trick behind credit cards that often contributes to getting  you falling into credit card debt is the fact of the monthly minimum  payment that your card statement asks for. Many people get more credit  cards than they can handle based on this fact; the minimum asked is very  affordable, but repaying that minimal amount, you are practically  covering part of the interests but far from paying back the whole debt.  Try to repay as much as you can every month rather than just the minimum  even if you only have one credit card.

Avoid Additional Cards Although, it might be convenient to give your spouse or your grown kids  his or her own credit card, this could be a hazardous option. Additional  credit cards may or may not have cost, but the true fact is you cannot  predict the spending habits of your family and even setting a limit for  these extra cards, your debt could go out of control. If you need to  provide your family with plastic money, give them additional debit cards  instead.

Avoid High Interest Rate Cards

Finally, if you have more than one credit card, try to get rid of  those with the high interest rates by consolidating your debt onto the cheaper credit card. If you have already fallen into credit card debt,  you can consolidate your debt or if you have only one credit card, you  can always consider getting a second credit card with lower interest  rate to transfer your debt.