5 Expenses You Should Avoid Paying with a Credit Card

5 Expenses You Should Avoid Paying with a Credit Card

A credit card may seem like a friend when you’re in a crunch, but misuse of the cards can create a lot of stress or even financial ruin. It’s important that you know when to – and when not to – use your credit cards to prevent a mass of debt that you can’t seem to get out from under.

Read on to learn five expenses that you should never put on a credit card!

1) College Expenses

No one wants to graduate from college with a lot of debt, but credit card debt fresh out of school can be the worst. Avoid placing your college tuition on a credit card, as the interest rates will likely be much higher than you can get with a regular loan through your school or the government.

Check out any and all scholarships offered by your high school, hometown, or the college you will be attending. If necessary, get a part time job to help pay for expenses such as books or gas to and from school, so you aren’t tempted to put it all on a card.

2) Wedding Costs

Similar to college, newlyweds shouldn’t begin life together with an alarming credit card balance. Financial stress is not something you want to create in your first years of marriage. A smaller wedding may not be as extravagant as you wish, but it will relieve you of any possible arguments over the debt you have waiting for you as soon as you return from your honeymoon.

Create a wedding budget, and accept that a smaller wedding may be necessary to avoid the hassle of credit cards. Alternatively, push back the date until your wedding account has enough in it to cover the essentials you want for your big day.

3) Furniture

The “0% for 12 months” credit card offers from furniture stores may seem enticing when you want to redecorate your bedroom or the den, but avoid financing such a large purchase. Sure, you have a year to pay it off, but the odds that you will are slim and no one wants to have such a large debt looming over them when trying to enjoy their new purchase.

4) Vacations

It’s fun to take a break from the real world, but not so much when you return to a large credit card bill. It’s very easy to spend more than you planned when you charge your lodging, food, and attractions. Find ways to save money on your trip rather than introducing more stress into your future.

5) Medical/Tax Bills

Sometimes, serious bills arise that we don’t plan for. A child has a hospital stay, or you miscalculated your taxes and owe the IRS. You may want to reach for your credit cards to settle these debts, but it’s usually not a good idea. Instead, remedy the situation by reaching out to the company you owe money to and setting up a payment plan.

 

 

8 Great Tips for Paying Down Debt

8 Great Tips for Paying Down DebtOne of the biggest obstacles many of us face in our financial life is getting rid of debt. Think how much freedom you would have in your budget if you weren’t still paying off the vacation you took 3 years ago, dinners out 6 months ago or the clothing hanging in the closet with the tags still on them. So what’s the magic solution? The magic solution is, to steal a phrase…JUST DO IT! I have been chiseling at my own debt for the past three years, with the end in sight in two. Here are the tips I have found useful.

1) Get Serious

Don’t think about this in theory only. You need to get in there, get dirty and make hard choices. You need to understand this is not a way of life you will have to adopt forever, but it will forever change your life. Prepare to make sacrifices and stick with it.

2) Make a Plan

Use online calculators to figure out realistic monthly payments. These will allow you to plug in your various debts, their interest rates and the amount of time you would like to have those debts paid within.

3) Sell Anything You Don’t Need

Think about all the “stuff” you have that you don’t need. Be brutal. Sell those items and use the money to pay down your debt. Put ads in the classifieds and on Craigslist, have a garage or yard sale, take things to the consignment shop, sell extra gold for cash. The side benefit to all of this is the peace you will feel when you don’t have all of this extra “stuff” weighing you down.

4) Work a Part-Time Job

Pick something you will enjoy so it’s bearable, but find something to bring in extra income. I like working with people, so working at the guest service counter of a local discount store has been a great fit for me in the past. Those paychecks go directly to paying off debt.

5) Sell Your Skills

What are you good at? What can you do that others don’t like to do? You have an opportunity to get paid for these things! Mow lawns, tutor, baby sit, run errands, freelance, do handyman work, drive for those who can’t…the possibilities are endless.

6) DON’T Take on New Debt

Just because you have cleared up extra room on your credit cards as you pay off your debt does NOT mean it’s okay to charge them up again.

7) Buy Only What You Need

If it’s not in your budget, don’t buy it. If you can borrow it, don’t buy it. If you can improvise and use something else, don’t buy it. If you can repair something you already have to use in place of it, don’t buy it. Are you seeing a theme here? Stop buying things you don’t need!

8) Treat Yourself

This is not an excuse to spend money. Do however, do things that you enjoy…take a bubble bath, or a moonlit walk, cook a dinner you truly enjoy. Spend your life doing things you enjoy, but don’t spend your life spending.

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