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Avoid Future Credit Card Debt
Tips for graduates

Summary: Century Negotiations offers graduating clients 4 surefire strategies for avoiding credit card debt in the future. These tips can help you stay on track.

There are countless hardships that can lead to credit card debt. Some of the most common include unemployment, underemployment, and unexpected medical expenses. Any financial hardship can easily result in becoming dependent on credit. Regardless of the situation, credit card debt can (and will) add up if it’s not constantly maintained. Sometimes relying on credit is unavoidable. But sometimes, with ongoing awareness, it can be avoided.

Many of our clients already know how easily credit card debt can spiral out of control, and how difficult it is to regain control of your debts once that happens. While we hope that everyone could stay away from all credit in the future, we understand that’s not always possible. So here are a few tips which may be able to help you avoid out-of-control credit card debt moving forward.

1. Pay On Time Each Month
Extra charges and fees accrued for late payments, even if the payment was made only a few days past the due date, can compound your debt. Try to get an organized bill-paying system in place so that you remember when your bills are due. You may want to check discount stores for dry-erase boards or cork boards to display bills and due dates where you can see them often. Maybe list due dates and paydays on your calendar or day planner.

2. Keep Your Balance Manageable
According to the Federal Reserve, of those American households that have credit cards, about 58 percent carry a balance. If you charge more than you can pay off in full each month, CreditCards.com suggests you reconsider your spending habits. Using your credit card to borrow from tomorrow to get what you desire today can lead you back into debt before you know it. Try to remember what you learned from your debt negotiation program. Consider purchases carefully, weigh wants and needs, and avoid carrying a balance that you cannot pay off completely each month.

3. Budget, Budget, Budget!
It’s always a good idea to examine where your money goes and see if you spend more than you make. Breaking down your expenses can help bring any wasteful and unnecessary spending to the forefront. Once you see how your necessary expenditures compare to what you spend on things you merely want or enjoy, you may find that you are indulging in some things you cannot afford. Try to avoid using your credit cards to pick up the slack on entertainment and extra expenditures. However, it might be wise to set aside a small amount of cash whenever possible and save for a special, occasional treat. Consider how much more rewarding and less stressful it would be to spend a manageable amount on wants instead of giving yourself permission to purchase anything you desire with a credit card.

4. Use Cash More Often
According to CreditCards.com some people may not attach the same value to noncash substitutes, such as credit cards, and could spend more when they use them. The next time you purchase something, physically counting out the cash could make you think twice about what you plan to purchase.

Concluding Thoughts
If you can follow these credit card basics – pay on time, keep a low (or no) balance, budget, and spend with cash – you’ll likely stay in good financial shape. But we understand this is often easier than it sounds. When hardships hit, it’s difficult, if not impossible, to not fall into debt. While you’re a Century Negotiations client, we encourage you to contact us if your situation changes and you need any guidance about your program. Our goal is not only to help settle your existing debts, but also to arm you with the financial knowledge to avoid debt in the future. Feel free to contact us anytime.

Resources:

Federal Reserve
http://www.federalreserve.gov/

Creditcards.com
http://www.creditcards.com/

Internal sources