by Catherine Woods

Created on: December 03, 2009

Credit Cards can be a great financial tool if they are used correctly. However, most people abuse credit and find themselves deep in debt. This misuse of credit cards is why most people should just stay away from them altogether. Here are some things you can do to resist the temptation that credit cards can bring.

-Reduce the Number of Cards

If you currently have 7 credit cards, cut down to 3. The fewer cards you have, the less credit card debt you are likely to accumulate. I would suggest keeping the credit cards with the smallest credit available to reduce how much debt you can take on. Remember, that you can close an account even if you still have a balance, so that is no excuse. You will have to continue to pay off the debt, but the temptation to charge more will be gone.

-Put them on Ice

Freeze the credit cards that you decided to keep in a block of ice. This makes getting at the credit card more inconvenient and so you are less likely to make unnecessary purchases. The time it takes for that card to thaw out might just be what you need to keep yourself from spending. In the end, keeping credit cards out of reach will help you stay away from the debt they cause.

-Cut your Spending

So many people use credit cards to buy things they can not afford and bridge the gap between their expenses and income. This is a very reckless thing to do. Instead, start by cutting back so that you can pay cash for everything you need, and save for the things you want. Extras like, Starbucks, eating out, and getting a pedicure are great places to start.

-Start a Budget

If you don't know how much you need to cut your spending, then you need to create a budget. This is simply a list of how much you intend to spend on different items. If your spending is greater than your income, then you need to cut back until your income is greater. A budget will also help you plan for irregular expense that you might otherwise have used a credit card for, and thus go into debt.

-Have an Emergency Fund

However, even with everything above, the best way to stay away from credit card debt is to have an emergency fund. Having extra cash around for emergencies will keep you from charging large amounts of money to a credit card that you will not pay off quickly. When you make your budget, be sure to allot money to put toward this fund. Remember, even having as little as $1000 in an emergency fund can save you from having to use your card when an emergency hits.

Now that you have the knowledge, do your finances a favor and stay away from credit card debt. Debt is financial slavery that will reduce your purchasing power in the long run. So, avoid credit card debt and your future self will thank you.

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