Stop the Debt Cycle – Avoid Credit Card Debt With These 3 Simple Tips

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When you are deep into debt and trying to dig your way out, one of the first actions you need to take is to stop the debt cycle and avoid adding more credit card debt to your existing balance. You work hard to pay the minimum payment due — and hopefully pay some extra money towards the balance as well — to bring your balance down but, then you end up charging purchases on your credit card and just increase the balance even more than it was before. Then the cycle of paying and charging repeats. At this rate, it may seem like an endless battle. However, the following tips will help you to break the cycle and become debt free.

Live Within Your Means

If you can not pay cash for a purchase, put the card away, back up slowly, then turn and run as fast as you can. Seriously, if you will need to use a credit card to make a purchase, you can not afford to buy the item. Before you decide to buy anything, think carefully about the purchase. Will you feel better or be better off in the future if you purchase that spiffy new gadget or if you use the money for that item towards getting out of debt? Once debt is gone from your life, you’ll be more able to afford the gadgets you want. So, always live within your means, use cash and not your credit card and if you don’t have the cash, wait to purchase the item.

Save For Emergencies

Emergencies can be a situation which may cause you to use your credit card. To prevent increasing your outstanding debt, start saving a small amount each month or week by taking a few dollars from your paycheck to put into your savings account. This can be your financial cushion in the event an unexpected crisis takes you by surprise and help keep you from taking expensive cash advances from your credit card.

Create and Follow A Budget

Yes, it’s the dreaded budget but it is a necessary part to stop the debt cycle and get out of debt. By creating a budget, you will be able to know exactly where your hard earned money is going each month. You will also be able to see where you are spending too much money on excessive or impulse purchases. Once your budget has been created, you can find all the areas where you could cut back or eliminate to save money. Use this new found money towards reducing your debt.

Now that you have three ways to break the debt cycle, you need to begin working on your plan to eliminate those cash sucking credit card accounts from your life. Your plan will get you started on the path to becoming debt free.

Source by A. C. West

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