Credit Card Quick

The Four Easiest Ways to Plunge yourself into Debt

There are many articles out there that teach you the importance of good credit and low credit card debt; however, this article does just the opposite. What better way to ruin your credit and get yourself in over your head in credit card debt than to follow these four, simple rules?

1. Forget about your budget – One of the easiest, most surefire ways to get yourself into deep credit card debt is to spend like you have no budget. Many individuals, with a credit card in their hand and a hefty credit card limit, are likely to overspend. This is because a credit card can quickly give individuals a false sense of wealth and security when, in reality, it is debt that they simply cannot afford to pay off. Making a budget and sticking to it is often a great, first step in reigning in your credit card purchases and keeping your mind realistic about your expenses.
2. Pay only the minimum payment – It may be incredibly tempting to pay on the minimum payment each month, but that will get your credit card debt nowhere fast. The best case scenario is paying off your credit card debt in full each month; however, if this isn’t possible, make it a point to pay more than the minimum payment so that you are paying on the principal of the loan, and not just the interest.
3. Make your payment late – Making your payment late is a great way to plunge yourself further into debt! From late payment fees and increased interest rates to a drop in your credit score, making late payments is, without a doubt, the best way to ensure that you will remain in credit card debt.
4. Take out cash advances – Cash advances are sneaky little conveniences that end up costing big in the long run. First of all, cash advances come with their own, higher interest rate than standard purchases. Second, they raise little red flags with your credit card company that you may be desperate, thereby often signaling a drop in your credit score and an increase in your credit card interest rates.

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Posted on Friday, Dec 18, 2009 under "Credit Card Debt"
Post tags: budget, cash advances, good credit, late credit card payment, low credit card debt, minimum credit card payment, overspend

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