Even though having access to credit can be quite useful in a number of ways, if it isn’t needed, then it may be better to avoid getting into debt altogether.
How can one avoid getting into debt?
Pay with cash whenever possible
If you have the option of using a debit card or actual cash where possible, this may be a good way of avoiding getting into debt. By using cash you are forced to become disciplined about how you spend your money.
Avoid impulse purchases
By having a set budget and sticking to it every month you can avoid making impulse purchases.
Compare prices before making major purchases
One of the easiest ways of ensuring that you don’t get into debt is by becoming prudent about how you go about making purchases. If you compare prices before major purchases, you are likely to remain realistic about how much money you actually have to spend.
Keep a record of all credit card purchases
By monitoring your spending you are able to keep track of how much of your income is going towards the servicing of debt. This may be just the wake-up call you need in order to avoid getting into debt.
Read about money
This can expose you to new ways of thinking about money. Reading about various topics from savings to investments and interest rates can inform you better about how to spend money efficiently. The more you read the more knowledge you’ll gain, so you can avoid getting into debt.
Cancel memberships that you don’t use
If you have credit agreements which you no longer use, make sure that you cancel them, so that you don’t waste money paying for services you no longer need.
Pay your credit card balances more than once a month
One of the easiest tricks for paying your debt off quickly, or to avoid getting into debt altogether is by paying more than the minimum balance on your credit card. If you pay more than once a month, your payments will always be up to date.
Redeem your credit card rewards
Credit cards often come with reward programmes designed to help you save in certain ways, so you need to use these rewards.