Pin It

Life with Credit Cards: Simple Tips to Avoid Card Debt

Managing Debt on Your Cards Wisely

This is a post by Mayank Malik.  Mayank writes on money, cars, sports and all things dad-related.

In the last post, I talked about how to choose the right credit card for you and your family. Today, let’s look at managing those credit cards. With the unmatched convenience that cards bring into our life they also bring the perils of debt. Credit card debt can be a scary thing and extremely difficult to get rid off.

So, how do you avoid this debt trap without having to do away with the convenience of a credit card? Here are a few money management tips that we keep in mind to help our family remain debt free early in life.

Create a Monthly Budget

My first recommendation to you is to create a monthly budget with heads like Rent/Mortgage, Household Expenses, Fuel, Entertainment, Shopping, Estimated Travel and Medical Expenses, among others. Ideally, you should deduct 10 %( more the better) from your income and then create your budget for the month/quarter. The 10% should be stashed away as savings/emergency fund at the start of the month. This is a great tool to get to what I call ‘cash in hand’, much like a business would have.

 For instance, if you earn $10,000 a month then your ‘cash in hand’ is $9000 and the $1000 should go in a separate savings /checking account or just put it aside in an envelope in your closet. Spend on your credit card keeping this budget in mind.

Stick to Your Budget

Ensure that your overall budget is ‘met’ at the end of the month or break it down into a weekly or a fortnightly budget. So, if you shop more than what you set out to at the beginning of the month then cut down on your Entertainment expenses. In other words, don’t worry if you exceed your budget on any individual head but compensate it with spending less on another.

 Do Not Chase Those Rewards

If you hold a credit card with a good rewards program or a cash back program then don’t end up spending more than the reward itself is worth. Stick to your needs and minimize your wants.

 Balance Transfer Credit Cards

 Remember the money-spinning balance transfer rates will not last forever. Six months is the norm now. The “normal” rate will return sooner than you think, so use the interest-free period to uncompromisingly pay down any built up balances.

 Pay Your Balance in Full Each Month

 If you follow your budget then this is a given. Following a budget will ensure you will never carry a balance. It is difficult to stick to your budget 12 months in a year. Give yourself a pat on your back if you can do it for 9-10 months in a year.

 Say No to Cash Advances

 Cash advances are one of the worst ways to use your credit card. The astronomical interest rates will hit you hard. If you have to use your credit card to get cash, then you need to think hard about an emergency fund. Rework your budget and create an emergency fund NOW.

Less is More

 The more credit cards you have, the more the likelihood that you will charge on them. In addition, it is extremely difficult to manage multiple accounts and remember “pay by” dates for all of them. Another benefit of limiting your credit cards is that you accrue more rewards/miles since most of your charges are on one or two cards. The more you spend with a single card company & strengthen your association with them helps you while negotiating for one time waivers of late fees and similar benefits.

How do you avoid & manage your credit card debt?

Photo Credit: Wonderlane

Related Posts with Thumbnails
The following two tabs change content below.
Mayank is married to Prerna Malik and is blessed to be working with her in their business, Social Media Direct. He and Prerna enjoy brainstorming content strategy and social media solutions for their clients.
About Mayank Malik

Mayank is married to Prerna Malik and is blessed to be working with her in their business, Social Media Direct. He and Prerna enjoy brainstorming content strategy and social media solutions for their clients.


  1. Good read!

    The critical thing is “stick to your budget” I think. I would add: the moment it looks like you’re going to overshoot that budget, remove your credit card from your wallet and lock it up at home. Don’t carry it while shopping. This will ensure that you only spend on something if you have the cash to pay for it. By leaving your credit card at home, you’re essentially leaving temptation at home – or at least making it that much more difficult to give in to it!

    Wayyy back when I got a job with a salary that barely met our expenses, my mom and I had a system. We’d make a budget and for the major expenses, have a few envelopes, each labeled with the expense head. We’d put the cash for each of these into the envelopes. Any left over cash went into an envelope called OXYGEN. Mom used to joke – that’ll help us breathe easy in an emergency. I’ve come a long way since then, and I still have that cover called OXYGEN. :-)

    • Hi Vidya,

      Thanks so much for sharing your idea of the ‘Oxygen’ envelope. Seems like a great idea! You’re spot on about leaving one’s card at home when the spending gets a bit too much.

  2. This is really great advice Prerna! The sticking to your budget for me is what makes everything else fall into place.

    • Hi Wendy,

      Glad you liked the post! You’re right sticking to a budget is the key and not always the easiest to do :-)

Speak Your Mind