WealthStudents.com

The simplest way to avoid credit card debts is not to have a credit card in the first place. However, if, like most of us, you can resist everything except temptation and you have run up a few large bills on your credit cards, then make sure you pay the balance off before the due date. That way you can enjoy interest free credit.

Sounds easy but achieving that might take some discipline.

Many people imagine that having a credit card is like getting free money; big mistake. Unless properly managed, credit cards can become expensive so you need to work out very carefully how you are going to handle your cards so you can avoid getting into debt with them. Buying something with borrowed money now might seem like a good idea but you might change your mind about that six or eight months down the line when you realize how expensive that item has now become!

The simple trick is to avoid spending more than you earn. If you stick within this simple limit and pay off your cards before the interest falls due, then credit cards will present no problems.

If you still need to use your credit card for a total that you cannot manage on a monthly basis, then some financial planning might be in order. For example, you know that you’re going to be spending a lot of money over Christmas, so put a little aside in the months before Christmas. This money can earn you interest if you chose this route, rather than you paying interest after the event.

If you’re not in a position to carry out this kind of sensible strategy, then at the very least make sure you are paying off the debts with the highest interest rates first.

It’s a sad fact that most of us are paying too much for our credit cards. Shop around for the best possible terms. Some credit cards even offer an interest free introductory period. Great! However, make sure that when the introductory period is over, that you have paid off the outstanding balance. Then you are free to look for another introductory offer.