It seems that credit card companies are targeting Americans harder for credit cards. In addition to seeing tons of credit card offers in your mailbox, credit card companies are targeting younger and younger consumers. Indeed, many college students graduate with tons of academic and credit card debt. Credit cards, and the temptations they represent, are everywhere.
If you don’t want to get buried in debt, keep the following in mind whenever you are tempted to whip out plastic to pay for a purchase. The sooner you incorporate these into your buying and financial decisions, the better your personal bottom line will be. Don’t get us wrong, credit cards are a great help – if used properly. Sadly, too many people use them the wrong way and end up getting buried in debt.
If you want to claw your way out of the pit of credit card debt, all it takes is to keep the five tips below firmly in mind. They can mean the difference between financial life and death for you.
1. Plastic is not paper
Too many Americans think that their credit cards are like cash. They whip out the card for even the smallest purchases. This happens when people equate the credit card with cash. Make it a habit to bring cash and use it. Don’t use plastic instead of paper.
2. Your credit card is not a security blanket
Rely on the amount of cash you have to carry you for the day. Don’t think that your credit card will handle all the expenses you incur during the day. This is a serious problem because it means you’ll have more ’emergencies.’ Instead, rely on your emergency cash for peace of mind.
3. Plastic is for the big stuff
Separate spending between cash and cards. Use cash for the small daily expenses and small to moderate monthly bills. Reserve the big purchases to your credit card. Keep this division intact. If not, you will be packing on quite a bit of debt.
4. Plastic is for emergencies
It’s funny how every small expense quickly turns into ’emergencies’ because you have a credit card. Discipline yourself early on to only use plastic for true emergencies. A real emergency is precisely that-a sudden need that requires one time or very rare huge expenditures or expenses that occur when you don’t have ready cash to cover it.
5. Keep better records of your cash purchases
One of the biggest attractions of credit cards is that they do your paperwork for you. Instead of making a meticulous record of your cash purchases, whipping out the plastic for purchases shifts the accounting and paper trail to your credit card company. The downside is you will get in the habit of using your card all the time and your expenses may explode. Instead, go back to manual mode and recipes when tracking your purchases.