Credit cards, when not used responsibly, can be the downfall of you personal finances. Most people, even with the best intentions, will misuse their credit cards and find themselves in a large amount of debt. Avoiding credit card debt altogether, is the best way to stay away from financial ruin. In order to avoid the temptation that credit cards can cause you must follow certain guidelines to keep your spending in check.

Things You Will Need

Emergency Fund
Self Control

Step 1

Put your credit cards in a block of ice. For those that use credit cards for impulse purchases, this is a great solution to curb the temptation. It takes time for that credit card to thaw out, and so you will have time to think through your purchases. You will likely find that you don't really need the item after all.

Step 2

Write down a budget. Other people use credit cards to bridge the gap between their expenses and their income. This is a very dangerous habit to get into, and it is usually avoidable with a budget. By simply writing down all of your expenses and income and sticking to what is on the paper, you will be able to cover all of your expenses without using that piece of plastic.

Step 3

Reduce how much you spend. If you have made your budget and your expenses are greater than your income, then you need to start cutting down what you spend. The morning cup of coffee, dinner out, or getting your nails done can all really add up. Cut the non-essentials out and you will be able to live debt free.

Step 4

Save for Emergencies. When unexpected expenses come up, many people reach for the credit card to cover the bill and then find it hard to pay off later. This is very unwise and completely unnecessary if you have money set aside for emergencies. A $1000 emergency fund can go a long way for unexpected expenses. Start saving and you will be able to avoid using your credit card for emergencies.
If you are diligent in following these steps you will be able to avoid credit card debt for the rest of your life. Millions of people have learned that it is possible to live debt free, and you can be one if them if you are smart about how you handle your money. So put those credit cards on ice, start working on your budget, cut your spending, and build up your emergency fund. You will be glad you did.

Tips & Warnings