3 Ways to Avoid Overspending and Debt When Using Credit Cards

Unhealthy consumer spending can cause one a number of problems and can lead to debt that is hard to break out of.

A number of Americans tend to overuse or misuse credit cards with very unpleasant results. Here are 3 ways by which you can avoid these pitfalls apart from building a high credit score:

1: Use other methods of payment

People usually spend much more when using a credit card than other forms of payment. This is because of the negative feeling that occurs when parting with cash. This, of course, does not happen when using a credit card.

 2: Know your credit line

Your credit line is usually the maximum amount of money you are allowed to spend in a particular billing cycle. What makes this so important is that thirty percent of your credit score is derived from your credit utilization ratio that is dependent on your credit line. In other words, it is the money you owe divided by your total credit line. The healthy range to maintain is within 30 percent every month. Anything more will hurt your credit score as a result.

3: Avoid withdrawing money with your credit card

Withdrawing money with your credit card as a cash advance is very expensive. Avoid it at all costs. This is because you will pay interest for it as well as a transaction fee. What this really amounts to is that the value of these dollars that you’ve withdrawn is less than their face value.