Credit cards are often considered to be responsible for a persons financial problems.
Is it the credit card or is it you, not being able to manage your credit card debt? If you are not careful in your dealings then there is a possibility of running up large debts which would then prove difficult to clear.
There are some basic points to keep in mind when using credits cards which will ensure that you are not faced with impossible payments and in an emergency you have the card to fall back on.
First off, formulate a budget and stick to it.
Try not to get tempted into splurging with your card.
If that's the case, leave your cards at home unless absolutely necessary.
One policy to adopt is to pay more than the minimum due mentioned in your statement.
That way some amount of the principal will be taken care of.
In most cases, the minimum amount due only takes into account the interest accrued for that period so your outstanding remains the same.
Another option would be to transfer the existing balance to a card which has a lower rate of interest for a short period.
That would save you some interest payment and help your overall budgeting.
But remember that after the grace period the interest reverts to the original.
Another option would be if you have equity in your home which can act as collateral and you can clear the higher interest card debt for a lower interest home equity loan.
Remember if you default you stand to lose your home.
There are free credit counseling firms available to help you deal with your debts but the only viable solution is to make your payments on time.
Using your card wisely will save you a lot of trouble and leaves you happier.
A point to note would be: never forget that the credit card is a loan and it has to be paid back.
Keep track of your balance due and stop using the card till the balance is clear.
Keep receipts so you have a record and can catch incorrect charges at any time.
Making payments on time keeps your payment history healthy and the company will, if you were to ever want it, sanction a loan just on the basis of your history.
Last but not least, avoid taking your card to places where you know there is a likelihood of you overspending.
Cash spending can be kept in check by sheer virtue of the fact that when you run out of it, no-ones going to be selling you anything, anymore.
But a card has infinite possibilities and herein lies the debt trap.
Be careful or you will find you have bitten off more than you can chew and getting out of this debt trap will be difficult and exhausting.