by Katerina Nikolas

Created on: May 30, 2011   Last Updated: June 20, 2011

The most obvious way to stay away from credit card debt is to simply not use credit cards. Whilst they are undoubtedly useful tools to help to establish credit they can wreak havoc on ones credit rating if consumers carry credit card debt. Credit card users generally fall into one of two distinct groups: those who use credit responsibly and never carry a balance, and those who use them as a way to live beyond their means.

Inevitably the latter group are in danger of accruing debt on their cards if their spending outpaces their income. Credit cards allow consumers to spend money they do not have and borrowing by this method can turn out to an expensive mistake. Those who use credit cards irresponsibly will only experience the negatives of credit card use and forgo the advantages. Such usage may also play havoc with ones credit rating.

Many develop good intentions to rein in credit card spending but succumb to the feeling of entitlement that credit cards allow. Retail therapy may well feel good at the time, but window shopping until one can actually afford purchases without resorting to credit can save stress and debt collection calls later.

With the ease of online shopping with credit cards it isn’t even enough for some to leave their cards at home when shopping, or opt for the popular choice of freezing them. If the temptation is really too much and points to debt the only answer is to cut the cards up. Alternatively reckless spenders could switch to the financial chastity belt of MasterCard’s inControl credit card which helps customers to manage their money.

In order to use credit cards and yet remain free of credit card debt it is vital to have an emergency fund in the form of savings. If circumstances dictate that the credit card bill cannot be paid on time or in its entirety, savings can be used to settle the bill before late payment charges or interest charges are levied. Doing so also protects ones credit rating.

Many card holders are attracted to cash back and reward programs. However there is no gain to be made at all if the card holder carries a balance that accrues interest, as the charges outweigh the average one percent return. Yet inevitably there are some who concentrate spending on credit cards in search of the reward, with little regard to the importance of paying more than the minimum payment.

Any consumer who cannot afford to pay their credit card balance in full is living beyond their means. Even presuming that a high ticket purchase can be made on credit and paid off over time is folly when the future is uncertain. Those who finance vacations on credit cards may well return to redundancy or a medical emergency which thwarts the best laid plans to repay the debt.

The only way to ensure that there is no risk of credit card debt is to only use cards when the funds are already in place to meet the resultant statement bill or to steer away from credit card usage. Debit cards are a wonderful alternative that prevent debt accruing on plastic.

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