Effective Ways to Avoid Credit Card Debt

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The most important thing about credit cards is your mindset. When you have a credit card, what is in your mind? Are you going to entertain yourself and your friends with the card or to buy things you want on credit? Stop thinking about the word credit and treat your credit card like cash. Take advantage of your credit card for the following purposes only:

The objective of holding a credit card

·         Convenience: Avoid carrying a lot of cash

·         Get reward points: To redeem for things you like

·         Savings: Get cash rebates and pay less

·         Simplify your life: Let credit card issuers settle your monthly bills

·         Smart buying: Purchase big-ticket items in installments without incurring interest

·         Online transactions: You need a credit card to transact online.

The wise ways to avoid credit card debt

The keyword is discipline: You have to pay your credit card bill every month fully and promptly. This is to avoid charges on late payment and incur high-interest charges by paying just the minimum amount. Interest is compounded and snowballed on the outstanding amount. It can easily go beyond your means to pay and you can end up bankrupt.

Treat your credit card like cash: It means you set aside the same amount every time you charge something to your card. At the end of each month, the amount you set aside is earmarked for credit card payment.

Self-control: Control your urge to want more things in life. Stop reading advertisements that are luring you just to buy, buy and buy.

Say no to credit: Getting into credit card debt is easy, but getting out of it is difficult. Avoiding credit and getting cash advances from your credit card is the best thing you can do for yourself.

It is a very simple idea: no credit, no debt, and no money problems.

Credit Cards and Young People

According to a report from Credit Counseling and Debt Management Agency of Bank Negara Malaysia or The Central Bank of Malaysia, among the cardholders below the age of 30, 50% of them are unable to settle their credit card debt and they have to declare bankruptcy. In the survey, among the delinquent cardholders, 22% cannot properly manage their personal finance and another 27% cannot control the use of their credit cards.


What can young people, especially fresh graduates, do to manage their personal finance? Here are some useful tips


• Pay in cash: You will not get into debt when you pay in cash for all your purchases. Your spending is limited by your financial resources.

• Use prepaid card or debit card issued by Visa or MasterCard: For a start young people should use a prepaid card (it is preloaded with a sum of money and you use it as a credit card until the amount stored in the card is exhausted). You can also use a debit card and it is linked to your bank account. Like a credit card, you can charge your purchases to your card up to the maximum amount of your available fund in your bank account. You will gain credit card experience this way.

• Credit card: When you are using a credit card for the first time, remember to treat it like cash. For each Ringgit, you charge to the card back it up with cash for the same amount to meet payment at the end of the month. Do not opt for a minimum payment. You will not only incur interest but at the same time, it is the route leading to unmanageable debt and eventually bankruptcy. Use the card for convenience only. Don’t buy in credit to attract interest and debt.

• Impulsive spending: Do not show off your credit card by entertaining your friends lavishly with it. Do not buy what you want but use the card to spend according to your monthly budget. In this way, you stay out of debt. Getting into debt is easy but getting out of it is very difficult. Spend only your own money but not the bank’s money. Nothing is free in this world.


You can keep your credit cards but you have to spend within your monthly earnings and treat your cards like cash in your pocket or in your bank accounts. Settle the credit card bills promptly and fully to build your creditworthiness.

Getting out of Credit Card debt

Credit Card Debt

It is imperative that we make consumers more aware of the long-term effects of their financial decisions, particularly in managing their credit card debt, so that they can avoid financial pitfalls that may lead to bankruptcy.

Daniel Kahikina Akaka

It is easy to get into credit card debt. All you need to do is to charge and purchase what you want in life and then pay for the minimum amount at the end of the month when you receive the statement. Very soon, the outstanding amount plus interest will be accumulated to such an extent that it is beyond your means to pay. Getting out of debt is different. ball game. You need a two-prong approach. You have to break your habit of spending indiscriminately and pay off your debt faithfully by using a consolidated loan or a balance transfer.

Break your habit: You have to stop your impulsive buying habit or you have to keep the credit cards at home. You need will-power and determination to spend only on what you need and within your budget. You can’t pay off your credit card debt and at some time continue with your usual spending pattern. ”Here is a simple but profound truth. You cannot get out of debt by borrowing more money,” says Jerrold Mundis.

A consolidated loan: This is a loan that you get from a financial institution at an interest rate which is very much lower than your credit card. With this loan, you pay off all your outstanding credit card debt and start repaying the bank regularly until the full amount is settled. You will be able to pay off the debt much sooner as it is the only liability and the interest is very much lower. You can also transfer all of your credit card debt to a new credit card with a six-month 0% interest to pay off the outstanding amount in monthly installments. So you just need to focus on one credit card debt.

Control your spending and settle the outstanding amount faithfully and before long you will be out of debt. The most important thing is to stay out of debt.

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