The Struggle is Real: Kiwis vs. Credit Cards
Have you already paid off your student loan debts? Great! Thinking about getting a credit card next? Whether or not you have already settled your student loans, getting another means to acquire more debts can bring more trouble. These two are just some of the things that could put you in debt before you reach 30.
Going into a shopping centre with a credit card in hand is sure to cause spending mishaps. With all the convenience they offer, credit cards have been the preferred mode of transaction of most people.
Kiwis, according to an economist, are at an increasing risk of going back into debt. In 2014, reports said that the people of New Zealand are falling back into old habits last seen before the global crisis. In the same year, credit card debts have reached new highs with almost $6 billion.
How can you avoid spiralling into the depths of credit card debt? Rapid Loans shares some advice on how to save yourself from disaster.
Get Smart; Assess the Cost of Damage
Before you decide on getting a card, assess the damage that it is going to cost to avoid getting in the red.
If you do get one — or more — add the balances and check their interest rates. The interest rate people pay on average is around 17.3 percent. The number of credit cards you own determines how much you are going to pay and for how long you are going to pay for it.
Stop Spending; Leave it at Home
The most common mistake that anyone can do with a credit card is overspending. You can easily go beyond your means with a credit card.
As difficult as it is to do, the most sensible way to avoid debt is to stop making purchases using your card. This can also stop racking up interest. Instead, focus on how you can start paying off your existing debts.
Plan it Out
Another mistake that people do is pay the balance and then take indefinite breaks in between before paying the remaining balance. There is a possibility of interest piling up before your next payment.
Avoid this by setting a goal and aiming for a specific date to have all your debts paid off.
Remember, using credit cards for wants and needs has corresponding consequences. But, if you plot it right, you might just avoid going into debt.