According to the Financial Post, in it’s January 21, 2019 article, a poll conducted for MNP Ltd. found 46% of Canadians to be only 200$ away from financial insolvency at the end of every month. This means that almost half of Canadians have a hard time paying their bills. And there is no doubt that this is due at least in part to credit card debt.
Is it at all possible to avoid being part of this dire statistic? Yes, it is. Here are 4 credit card pitfalls to avoid:
Stay within your means by making a budget and sticking to it. Don’t use your credit card to purchase more things than what you can afford to buy. In other words, you should use credit to get only what you are sure you will be able to repay at the end of the present month.
Pay in Full and On Time
Avoid paying interest by paying your bill in full, and by making your payment well within the due date. Indeed, it can be quite frustrating to note that despite paying in full, you were charged interest simply because your money wasn’t received on time.
Think Twice Before Raising Your Limit
Think carefully before you raise your credit limit, especially if you already have a hard time making ends meet. An increase in credit limit means you have a greater possibility of getting even deeper into debt, which, in this case, is the last thing you want. Also, raising your limit could hurt your credit score, should you become unable to pay off the total balance due.
Read the Fine Print
If you’re thinking of getting a new credit card, be sure to read the fine print. Many credit card companies will try to win you over by offering enticing low-interest rates. But often these low rates are for a limited time only after which they will raise your interest rate.
Yes, credit cards can be invaluable financial tools. But it is important to use them wisely, staying clear from the pitfalls mentioned in this article. By doing so, you will avoid the financial hardships due to credit card debt overload.