Is Credit Card Debt Avoidable?

Is Credit Card Debt Avoidable?

credit card debt stressing woman

Credit card debt is easy to accumulate if you are not watching out. Credit cards make it incredibly easy to buy what you need when you need it. And also, incredibly easy when you feel an urge to splurge.

Whether you have a tire blowout on the road or need to buy airline tickets to get to a sick relative, it’s fantastic to be able to use a credit card to meet that emergency. But let’s face it, we also use our cards when it isn’t so urgent, like picking up the tab at dinner when out with a large group of friends or family or simply for our daily morning cinnamon dolce latte at Starbucks at close to $5.00 a pop.

Unfortunately, without some restraint, credit card debt can spiral out of control quickly. With multiple cards, the amount of debt you can accumulate may be shocking. Trying to pay off that credit card debt makes it more difficult to meet the common cost of living expenses such as housing, food, transportation, childcare, health care, and other necessities.

In many ways, credit card debt is an avoidable type of debt. You can often choose not to use a credit card and avoid the debt entirely, or if you do use it, pay it off monthly as soon as you receive your statement. Let’s learn about some strategies to avoid credit card debt.  

Always Pay Cash

Whenever possible, always pay for purchases with cash that you have on hand, whether with actual bills or with your debit card. None of the purchases you make this way will add to your credit card debt. Those Starbucks purchases? Pay them in cash. Using your credit card to make twenty purchases at Starbucks at $5.00 each is $100 you are adding to your credit card debt monthly.

Question Each Purchase

Before every purchase, ask yourself if you really need the item. Too often, we buy things without really thinking about if we need them, where we will store them, and whether something else we already own could do the same thing. For instance, buying a KitchenAid Mixer, which runs about $450 when you don’t bake often, has limited cabinet space, and you already have a hand mixer!

Live Within Your Means

It’s old advice, but it’s still relevant: “Live within your means” means if you can’t afford to pay for something in cash, you can’t afford it. To be clear, if you are not paying off your credit card monthly balance each month, you are not living within your means. Look for ways to live within your monthly intake, such as canceling streaming services you may not really be watching or eating more at home instead of out at restaurants, or cooking instead of ordering take-out or Uber Eats delivery.

Do Without

In some cases, it is possible to do without something instead of purchasing it. For example, before buying another winter coat because they are “On Sale,” think about if your old coat fits and is still usable. A less expensive way to update your winter look might be a $20 scarf in a trendy new color. Can you simply skip buying nail polishes or getting manicures and leave your nails unpainted? While these might be simple examples, they illustrate an important point about how there are many things we can do without in our lives and save us from accumulating debt.

Mend and Repurpose

The Amish community is well-known for its ability to save money and live frugally. One of the ways that the Amish are able to save money is by mending clothes or fixing items that break and repurposing items to use in other ways. Also, many of us are already environmentally conscious and are recycling, reusing, and repurposing. If you do, you benefit from that financially, and it helps our planet!

Find Alternative Financing Options

Credit cards are notorious for having extremely high-interest rates or hooking you in with a low or 0% rate which within a year or less will increase to a higher rate – a much higher rate. Virtually any other financing option would have a lower interest rate and be a more affordable choice. For instance, instead of putting a medical or dental procedure on a credit card, you could ask the medical provider to see if there are other payment plans available. For instance, if it is not an emergency, you may consider taking out a loan to pay for needed dental work. While this is still a form of debt, it will likely have a lower interest rate than a credit card would have.

Set Money Aside for a Rainy Day

Experts like Dave Ramsey recommend having an emergency fund with at least three to six months of expenses. As we all know, unexpected expenses and “rainy days” happen to all of us. The more money that you’re able to set aside to pay for these expenses now, the more you can reduce your reliance on credit cards.

Schedule a Consultation with Minnesota’s Kain + Henehan Law Firm

Regardless of the best advice and best of intentions, sometimes credit card debt is unavoidable. If you suddenly lose your job, or you are injured in a car accident and need urgent medical care, or if a tornado damages your house and you must find another place to live, you are often forced to use any means necessary to survive. You may have no other choice than to use credit cards to get through it. It is an understandable situation, but it can leave your once financial stability in shreds.

If you are being harassed by bill collectors, struggling to pay your debt off, and stressed all the time about your future, it may be time to consider personal bankruptcy.  Believe it or not, bankruptcy is a right under the US Constitution (Article I, Section 8, of the United States Constitution). Bankruptcy is a legal process that is designed to provide relief from overwhelming debt, and it can be a viable option for those in need of financial assistance. It can be a big decision to make but with our knowledgeable and compassionate bankruptcy attorneys, you will be able to make an informed decision. Filing for bankruptcy can provide you with the opportunity to get a fresh start and start rebuilding your financial future.

Contact Kain + Henehan by calling (612) 438-8006 or filling out the online form to learn more about our easy step-by-step. We are here to help you. Thinking about the prospects of bankruptcy can be scary enough; meeting with us should not be. We are here to make you comfortable from the very first phone call.

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