Ways To Avoid The Debt Trap
We all know that most countries in the world have been through a tough time financially and it iss easy to blame our personal debt onto that . Even some countries are trying to blame others and saying that they started it.
Maybe we should stop looking to pass on the blame and start to look for some errors we have made ourselves in our money life.
Let us look at the main area where we may be at fault:-
Credit Cards. Did we find those irresistible offers from the companies too much temptation and succumb?
All through the past twenty years there has been so many offers designed by the financial institutions to lure us into taking their particular card. They were giving us 0% credit for a period of time and similar offers. What we did not realize was that, after the initial persiod ended, their interest rate would go up considerably.
When the letter announcing that dropped through our mail box did we just ignore it and accept the higher rate like most people do. Or were we sensible and look for another offer.
When we got the bill each month did we immediately look for the little box that said “Minimum Payment” and send that off to the company?
Of course we should have realized that that would mean that we had to pay interest on all the money that we did not pay off. So we immediately started the following month with a balance of a few dollars for which we had got no goods and no benefit.
It got worse though, the next month, when we did the same, that starting balance was a few more dollars and this continued month after month until we found that we could not even afford the minimum balance amount. Sound familiar? Chances are you then tried to get a loan to pay it all off and found that your credit rating was not good enough.
Hopefully you are someone who is not in this position so let us look at how you can avoid it.
Firstly the best idea is not to have a credit card at all but that is getting difficult particularly if we want to do some of our shopping online. However determine to use cash as much as you can. It seems worth more money when you pass over dollar bills than when you just give them a card.
Consider getting a prepaid credit card. They work just the same as a normal card except that you can only use the amount of money that you load onto it. So, if you want to buy something for $50 from Amazon, load that onto the card and you cannot be tempted to buy other things that you do not really need.
Build up an emergency fund. We all know that emergencies do occur so it is a good idea to put a little aside for the new car tires or the new refrigerator as you can then buy them in full rather than having to put them on a card and pay interest for ever. It should be built up as high as possible and then it can even tide you through serious things like job loss or illness.
In my opinion there are not many debt situations which have are totally out of someones control. It just takes a little preparation up front and a lot of willpower to avoid the debt trap.
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Twitter: richescorner
says:
speaking from one who’s had to climb out from a mountain of credit card debt, the best way I’ve found is to discipline yourself to use cash as much as possible. Use only what you are carrying on your person. you’ll find that there are a lot of purchases that turn out to really be optional when you have to pull physical cash out of your pocket. You’ll eat out less, spend less on luxury items and yyou won’t generally fall victim to those impulse buys. Then slowly, you’ll begin to save and pay off those credit card bills.
Richard recently posted..Free Premium Services To Help You Save and Earn Money
Twitter: steveborgman
says:
One of the best resources I can recommend to anyone in debt is David Ramsey’s online resource, My Total Money Makeover. You do need to pay an annual or monthly fee, but it’s very reasonable, and it will give you the kick in the pants and the tools to wipe out your debt, build up savings, and be generous with your money in the long run.
These ways how to avoid debt trap are really important to know and to understand, almost many people around the world experiences this. I think being practicality can be a good option, try to control yourself spending so much for you to be able to pay your debt.
Kate recently posted..שיווק סלולרי
Honestly all my friends thin I am nuts because I do not have credit card. But precisely because of this I do not need one. After my MOM spent lots of money , let’s say it straightly, for nonsense …Since then – no thank you, I need strict control on my funds!
Anna recently posted..dental crown cost
Very well said. I agree with the idea of building up an emergency fund because we don’t know what will happen to us in the future.
Nicholle Olores recently posted..Timber Doors
Twitter: AnnCapatino
says:
Hi Trevor,
Hope you are enjoying the New Year! A very timely article. Americans and America both seem to love debt. It is a hard habit to break once it has hold of you especially in our society of instant gratification. But I am here to tell lyou that it can be done. And, you are so right, it takes so much determination and willpower. Paying into that savings account each month is really much more gratifying!!
Ann recently posted..Debt Management Programs
Very sound advise for sure. If you must have a card, only have one and pay off balance as quickly as possible. If you do have debt pay it off. The most important thing is to realize that it is better to wait for things we want and save for them rather than buying on credit.
Lynda Cromar recently posted..Diane Hochman Gives Dingbat Presentation On How To Go Full Time In Network Marketing
I love topics like this as this really helps a lot in managing our finances and casting off debts. Credit Cards help a lot when you are really out of cash but you should pay it sooner otherwise you will be suffering from the dark interests.
Lyka Ricks recently posted..Why do Koreans love StarCraft?
Hi Trevor,
unfortunately, in these difficult day, everyone is in some kind of debt, more or less. However, thanks for your tips, and this share! Blogs about debt helps are more than welcome!
EleonoraEOF recently posted..Now Eat This! Diet Review by Rocco DiSpirito
Debt…i believe its the like an addiction that you cant quite get out of on your own. but thanks to this article and many other resources online, one can slowly learn to discipline themselves and eventually climb out of debt and experience some financial freedom!
paul recently posted..Sterling Silver 2 Piece Heart and Key Toggle Charm Diamond Pendant