As a responsible credit card account holder, it is ultimately your duty to make purchases and money decisions in the best interest of your personal financial situation. There are many tips for what you should do to maintain good credit, including making on-time payments, paying off balances in full, and checking your monthly statements for accuracy.
There are also some things you should not do in order to keep a good credit rating and remain a savvy card holder. One of the simplest and most costly mistakes that people make is maxing out their credit cards or using the entire amount of the card limit at any one time. Being maxed out on your credit means you no longer have any more credit to use on that card. You should also expect your credit score to be negatively effected as well. All in all, maxing out a credit card is simply never a good idea.
Being maxed out on your credit cards can also lead you to the edge of Lake Debt, where you are likely to go over the edge and start drowning in debt. So what can you do to avoid going over the limit on your credit cards? Here are some tips to keep your credit card balances in line and your payments up to date:
Leave The Credit Cards At Home
Whenever you go shopping for groceries or other items, financially conscious consumers know that the best trick to save money is to bring a list and stick to it. In line with that, you also need to leave your credit cards safe at home and out of reach of your impulsive buying fingers. It can be all too easy to splurge on items that you do not need nor can you afford, simply because you have a credit card in your wallet.
Rely On Cash
Instead of falling victim to the ease of our swipe society, start budgeting out the cash you need on hand for daily living expenses. This will also make it super easy to reconcile your bank statements.
Think About Emergencies Only
When you carry a credit card, try putting that knowledge out of your head and think of your credit card only in terms of emergencies, such as your car breaking down or your home needs emergency repairs.
Put Cash Back in the Pot
Whenever you use your credit card to make a purchase, take the cash equivalent of that purchase and place it in an envelope in a secure place. When the time comes to pay off your monthly balance, you will have all the cash to do just that and never worry about overextending your credit.
Pay Attention to Your Monthly Statements
Always make sure you pay attention to the bills and statements that come in the mail each month. By monitoring your statements, you will be able to spot fraudulent activities quickly and report them. It will also help you recognize what you are spending money on each month and may help your create a better budget. Additionally, by looking carefully at your statements each month, you will always know exactly how much you owe and when it is due, so you are always sure to make on time payments each month.
Maxing out your credit cards is a sign that your financial house may not be in order. If you go over your spending limit, expect to see penalties and fees only make the situation worse. Your credit card debt will certainly mount faster than you can pay it off and that is not the situation you want to get into with your credit.