Could these tips help you avoid carrying a credit card balance?
- Carrying a credit card balance comes with costly interest charges.
- I’ve taken steps to avoid carrying a balance for the past 20 years.
- I track my expenses and automate my payments so I don’t pay interest.
Credit cards can be a great tool for earning rewards and building up credit. But if you have a balance on your cards, they can end up costing you a ton of money due to their high interest rates.
I use credit cards all the time because I want to take advantage of the many benefits they provide. However, since graduating from college, I make sure to pay my statement in full each month because I never want to pay those high credit card finance charges again.
After going over my head in college, signing too many cards and working hard to pay them off once I realized I had a problem, I developed a system to make sure it didn’t happen again. Never again. Here’s how I make sure I don’t carry a balance.
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I follow my expenses
The most important step I’ve taken to make sure I don’t get into credit card debt is budgeting and tracking my spending. I’ve made a detailed plan to make sure my expenses always stay below my income. And I regularly monitor the amount I load onto my card to make sure I don’t go over the limits I have set for different expenses.
Since I keep track of how much I charge to my cards each month, I can make sure I don’t charge more than I can comfortably repay into my checking account. If it looks like I’m going to overspend during the month, I immediately change course and start looking for cuts to make or ways to increase my income so I don’t have to dip into my savings to pay the bill or get stuck. carrying a scale.
I automated my payments
Because I carefully track my spending on my cards, I know I will always have enough in my bank account to pay off the full balance owing. So, in order to be absolutely sure that I don’t have a balance, I have set up an automated payment for the total amount of charges accumulated during the month.
This automated payment happens the day after I get paid for my work, and that’s about a week before my statement is due. The money is withdrawn from my bank account when I am sure I have the money available in the account, so I don’t have to worry about overdraft fees. And it’s paid automatically, so I don’t have to manually remind myself to pay the balance or force myself to make the responsible choice every month. The default is to pay the card in full, so that’s what happens.
Now setting up automated payments wouldn’t work if I wasn’t sure there would be funds for payment, which is why the two-step process of tracking expenses and automatically paying the full balance is so important. This is a process that can work for anyone who wants to earn rewards on their credit card and build credit, but doesn’t want to run the risk of owing interest that could cost them their hard-earned money.
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