Remaining Free of Credit Card Debt Is All About Making the Correct Choice

My mom always used to warn us against biting more than we could chew. But with modern times, where anything and everything can be bought with a swipe of plastic, this advice seems archaic. Advertisements are woven around the sentiment that people who spend frugally are non achievers and end up envying people who can buy anything that they wish to. Half the population in this world wouldn’t end up clearing debts that they incurred a decade ago only if they had been a little thoughtful. Credit cards are very convenient and useful, but if used recklessly can result in a debt that’s difficult to get rid of. But the truth of the matter remains that it’s not only easy to remain debt free, but also to get rid of your credit card debt with a little self control.

A lot of customers do not know what they are paying for. When signing up, all that they look for is a company that offers the lowest introductory interest rate. An independent study by the University of Maryland economists has found that people often picked a card that had a teaser rate of 4.9% for six months rather than choosing a card that had a higher teaser rate for 12 months While this makes sense for people who would repay their debt within the six months, it certainly is not viable for people who cannot pay them back promptly. Thus they end up paying more. That initial rate is too tempting for us to thing about future consequences.

Most people when signing up tend to lose focus on the sundry list of charges that are applied. For example, the fine that’s levied when we miss a payment, the fees for going over your credit limit are all sundry things that are considered unimportant when choosing a credit card company. Rather than choosing a company that provides an appropriate credit limit, we often for unlimited credit. It’s basic human psychology to ignore future costs and concentrate on things that provide immediate gratification. But this inconspicuous list of fees and fine surfaces when we exceed our credit limit or miss a payment.

Another problem with having credit cards is that it often forces us to make irrational decisions. Spending money through a credit card is just not like spending real money. We don’t bat an eye lid to pay twice the cost of something that isn’t absolutely necessary. But the same product wouldn’t seem so lucrative had we been paying that in liquid money. Needless to say, determining the appropriate credit card company is the first step to remaining credit card debt free.

So the next time you decide to blame your credit card company for your debt woes, stop right there and think-‘were you right in choosing the right credit card company in the first place’.