How to Stay Out of Credit Card Debt
Many people think that young consumers should never be allowed to use student credit cards. They contend that teenagers are very irresponsible when it comes to managing their finances. And should young students be allowed to use their first credit cards, for sure they will fall into debt traps and experience great financial problems. But is this belief true?
Despite their tendencies to become careless when it comes to money matters, a lot of teenagers are able to prove that they can be entrusted with credit card accounts as long as they are given guidance on how they should manage their first credit cards. So long as they are given tips and pointers on how they must handle their credit accounts, they can certainly succeed in staying out of credit card debt.
So, to help young consumers, we have listed five tips that they can employ so that they can use their credit cards wisely. Through these tips, young individuals can surely stay out of credit card debt.
Five Tips on Staying Out of Credit Card Debt
1. Shop and compare different credit card programs. As soon as you enter college, for sure you will receive a lot of offers from different card companies. They will urge you to apply for the student credit cards they provide and they will even give you a slew of incentives if you do so. Even with the new Credit CARD act, companies will devise new ways to get you to sign on that dotted line.
But remember that it is never wise to take the very fist credit card offered to you. Instead you must take your time in comparing and evaluating the terms and rates featured in different credit cards for students. Consider the interest rates, payment arrangements, fees and charges as well as the application requirements for the card. This way, you can find and choose a card that will suit your needs and your budget.
2. Come up with a personal budget. Devising a monthly budget is actually an important life lesson that each consumer must learn. The sooner that this lesson is imbibed, the greater financial rewards the individual will surely receive. But is it difficult to make a personal budget?
Not at all. You just need to jot down all the expenses you have incurred in a month. Then deduct the total amount of your expenses from your allowance or from the proceeds of your student loan. After this, you will see whether you are living within or beyond your means. Now, what should you do if you discovered that you are living beyond your means? Well, it is about time that you cut down on unnecessary expenses. Resolve not to buy items on impulse. Instead make it a point to purchase only necessary and important items.. By doing so, you can allocate more money on your basic needs and even set aside some cash for your savings fund.
3. Stick to a personal budget. After devising your personal budget, you should resolve to stick to it. Spend only on the important items listed on your personal budget plan. This way, you can reach your goal of living and spending within your means.
4. Pay your charges on time. If you have outstanding debts, then make it a point to pay them on time and in full each month. Remember that making prudent and complete payments of your credit obligation will not only help you avoid paying additional costs and penalties. It will also help build your credit reputation and allow you to receive excellent financial deals in the near future.
5. Spend some cash. It is also recommended that students shop and pay with cash, even if they always have their plastic cash with them. The reason for this is that paying with cash for certain items can help keep your budget intact and promote financial discipline.
Processing your request, Please wait....
