May 30

5 ways to stay out of credit card debt

Reading Time: 2 mins

If you just corrected your credit card balances and are wondering how to keep yourself from doing this again, then we have got something for you. We are going to share a few quick tips that will help you stay out of debt, and built up your credit score.


Manage Credit Card Balances as Cash

Credit Cards are known for their “buy now, pay later” scheme, but it makes sure you have some money, to begin with. Yes, it assures you had something you could put in the plastic to make the purchase. This is a clever strategy that prompts you to enjoy the benefits of having a credit card like cash back, etc. to ensure you don’t end up in a balance you can’t pay back.

So, control your urges to buy the new flagship smartphone or Ultrabook, and deal with your credit card money as you were dealing with cash.


Keep Track of Your Spending

The amount of a credit line used compared to the amount of credit available is called credit utilization ratio. It is a deciding factor for your credit score calculation.

The fact remains, there is the specific ratio that promotes a user’s credit score to drop, but keeping your credit use low definitely helps. This leaves a positive impact on your credit score that forces you to stay aware of your credit card balance and be careful about how you spend it.


Control Your Expenses

A recent analysis shows that people spend at least half of their monthly take-home pay on housing expenses. When living expenses take up to half of your paycheck, you may need to make financial sacrifices in other areas including health, retirement, and it is a perfect recipe to fall into debt.

So you better take control of your home expense before they end up ruining your credit. Log on to and find your credit score to start with.


Reward Yourself First

A study shows that people don’t even save at least 10% of their monthly earning for an emergency. This means they will have to borrow money in case they end up in an emergency because they were less likely to be prepared for the surprise expense.

So you need to build an emergency savings fund that can easily cover 3-6 month basic expenses of the emergency. Start making automatic contributions to a saving account for emergencies every month. Do it even if you don’t have much to donate.


Don’t Raise Your Budget

We all want to do it, everyone is tempted to, but the challenge of staying out of debt isn’t related to how much you make, it depends on your ability to avoid wasting money.

Once you improve your earning power, like getting a raise, or establishing a business, then you can worry about raising your budget, but before that will put you in a financial mess.

But before you raise your budget, put the extra money in an account that will pay you interest help to increase the value of your cash.



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