Credit is just like a reputation. It takes years to build, and can be destroyed in an instant. While you might not see the value in it now, you will at some point. It is needed to buy a house, finance education, or purchase a car, for example. Credit must be used wisely, and responsibly to be sure that you don’t spend more than you make.
One of the best strategies to help you avoid credit card debt is to only use your credit card(s) for things that you have already budgeted for, such as bills. For example, your auto loan, student loan, utility bills, cell phone bill, and renters insurance.
It only takes one missed credit card payment for your credit score to plummet. The first thing you’ll want to do is to avoid carrying a credit card balance. This can be done by making sure you don’t buy anything you wouldn’t otherwise be able to pay for in cash.
Also be sure that you are choosing a credit card with a good interest rate. If you don’t, the interest can add up in the long-term, leaving you paying a lot more on your credit card bill then you would have had to pay.
Credit cards can be very tempting. It’s easy to remind yourself you’re up for a promotion soon when you’re looking at a new, expensive sweater you can’t afford. However, until you get the promotion, hold off on the sweater. Living on credit alone is a bad habit. You actually might end up paying more money to the bank just on interest than the price tag of the sweater.
If you aren’t able to control your spending, it may be wise for you to start carrying cash or a debit card, leaving your credit card(s) in a drawer for a little while. Be sure to always pay on time in order to avoid late fees. Even if you can’t make the full credit card bill payment, always make the minimum payment. A great way to remember to do this is by setting automatic payments. This way, you won’t even have to remember.