Being caught in a debt trap is a huge impediment to achieving a secure financial future. There are multiple reasons which can lead one to hit this roadblock. One of the most crucial reasons being impulsive, unplanned and overuse of credit cards. Most credit card users end up risking their financial freedom and planning, by falling into a credit card debt. Though if used wisely, a credit card can prove to be a huge blessing; it has multiple advantages like building credit, protecting purchases, coming in handy during times of financial emergency and making it easier to buy expensive items without carrying cash.

The flipside being, if used recklessly, a credit card can end up becoming like a high interest loan more than a cash substitute which bails you out during times of financial crisis. It is a known fact that the more the debts heap up, the difficult it becomes to get out of it. Minimum monthly payments (of the credit card bill) and exorbitantly high interest rates end up keeping customers in debt for years.It is very important to know the right way of using credit cards, in order to avoid debt.

Given below are few extremely crucial tips that will educate customers about how to use a credit card appropriately –

Don’t swipe your card for things you can’t afford : Most consumers have a bad habit of swiping their credit card for items they can’t afford to pay by cash. If you are guilty of the same, then please understand that not only are you living beyond your means, but also overspending. Under these circumstances, it becomes difficult to pay off your card balance at the end of the month.

Do not take cash advances : Taking cash advances through your credit card call for higher interest rates, no grace period and higher transaction fees. The accumulation of interest begins right from the day you take a cash advance.

Pay your bill on time and in full balance : Make sure that you clear your credit card bill on time and in full balance to avoid late payment charges, interest on the amount due and other charges associated with it. The opposite would just lead to further debt accumulation making it impossible for you to clear it.

Ensure emergency usage of your card : Credit cards are extremely helpful mediums to bail you out during financial emergencies. There are times when it is not possible to pay for an item by cash, and it needs to be bought urgently like flight tickets, medical items and bills. These are the times when you should use your credit card. To avoid getting into a debt trap, pay it down as early as possible.

Avoid using your card for paying for disposable items : Always trying paying your grocery bills or dining bills with cash. By doing this you can eliminate paying for items which no longer exist when the bill arrives. It is very unwise to pay interest on disposable items.

Create a monthly budget : Do not be misled by the credit card limit given by the issuer. Create your monthly financial budget based on the amount you have in your bank account. Depending on that allocate a small budget towards your credit card expenses, and make sure that you stick to it.

Try leaving behind your credit cards at home: The best way to stay out of credit card debt is to leave your credit cards behind at home. In this situation you will be forced to pay for your purchases only via cash, in turn avoiding debts.