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.

 

 

Life After Credit Card Debt -5 Tips for Remaining Debt Free

Nothing can compare to the sense of fulfillment and exhilaration you experience when finally becoming debt free. If you’ve managed to successfully and completely pay off all your credit card debts after an extremely long period of time—a very big congratulations to you!

Yes, you do deserve to celebrate a little after carefully handling every single dollar for many months or even years. However, keep in mind that although you are no longer in debt, remaining debt free is a completely different story.

Here are some useful tips on remaining debt free for the rest of your life:

1)  Stick to one or two cards.

While it may be impossible to completely stop using credit cards, the least you can do is have just one or two cards. Close your accounts if you find yourself constantly being tempted to spend more money than you can actually afford.

2)  Use cash.

You may have credit cards in your possession, but that doesn’t mean you need to use them. Always use cash to pay for your purchases unless using your card is really necessary. Keep your credit cards at home to avoid being tempted!

3)  Don’t spend past a certain percentage of your credit limit.

Commit to never maxing out your card again. Establish a limit to your credit card spending and stick to it. A safe bet would only be spending up to about 30 to 40 percent of your limit.

4)  Pay off your balance at the end of the month.

Only swipe your credit card when you are absolutely sure that you can pay off the entire amount within 30 days. This mindset may be a very difficult one to practice, but it is sure to keep you from going back in debt.

5)  Create an emergency budget.

One reason many people go into debt is because they lack emergency funds for when such crucial times arrive. Now that you are no longer paying off debt after debt each month, start working on beefing up your emergency funds instead. One easy way to build up your incidental funds is by setting up an automatic draft from your payroll account to your savings account!

As you are about to find out, life after credit card debt isn’t easy. Don’t get sucked back into debt, and don’t let all your hard work go down the drain! To remain debt free, you must keep making smart decisions and uphold your commitment at all times!

Photo Credit: iClipart

 

6 Steps to Work Your Way Out of Debt

Millions of people around the world are struggling to get out of debt. It is a long road, and it definitely isn’t an easy one. If you are one of these people trying to pay off an endless list of payables—don’t lose hope. Focus on being debt free, and take things one at a time.

Here are a few practical steps to help you work your way out of debt:

1. Stop acquiring new debt

The first step to working you way out of debt is to stop acquiring new debt. Yes, this piece of advice may seem obvious, but you need to start realizing that you cannot afford to spend money you don't have. Leave your credit cards at home or better yet, cut them up!

2. Look your debt in the eye.

One of the most difficult things to do is to face reality and total all your debts. Itemize each payable—student loans, medical bills, car loans, personal loans, credit cards and anything else you may need to pay off.

3. Select the first debt to work on.

Look over your list of debts and decide on which of them you’d like to tackle first. Is it the smallest debt or the one with the highest interest rate? Choose to work on a debt that will motivate you, and then continue to create an order for paying off your remaining debts.

4. Start paying.

Pay the minimum payment on all your debts. For the first debt on your list, pay the minimum amount plus whatever extra amount you can afford to pay. Keep doing this on a monthly basis until you have completely paid off your first debt.

5. Keep going.

You’ve entirely paid off one debt—and are definitely making progress! Repeat the process on your second debt on your list.

As you begin to see results, it’s extremely important that you stay focused on your end goal. Do not return back to your old spending habits!

6. Move forward.

Once you are worry-free, start working towards the future. Create an emergency fund, see the world and save for retirement.

The road to being debt-free will take a lot of time and even more dedication, but just remind yourself that your hard work will definitely pay off!

Photo Credit: iClipart

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