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Staying Away From Credit Card Debt

April 28, 2016Debt

There are times when debt is necessary, however, there are times where debt is equally unnecessary. With so many different goals and possessions to be desired it can become hard to discern which debt is necessary and which is not. A credit card can be a wonderful tool when it comes to paying for these wants, but you need to have the means to pay that debt off over time, preferably immediately. When confronted with a decision to buy something with credit you should ask yourself the following questions:

  • Do I really need it?
  • Can I afford it?
  • If I use my credit card, can I pay for it later without compromising my other debt?
  • Are there other, more important purchases that I could be making with this money?

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Reviewing these four points will help you make wise decisions when making purchases with credit. For example, if the item in question is not something that you absolutely need, chances are that you can put off the purchase until you have enough extra income to buy it without using debt to finance it.

If the item is something that you need, but you don’t have enough funding on your credit card to afford it, then it would be a good idea to look into a cheaper substitute for the purchase.

Likewise, if you do have the funding on your credit card, but know that the purchase is something that you won’t be able to pay back over time without creating financial stress, this situation should be reassessed to see if there are any alternative options for the purchase.

If you’ve found a replacement for the need/want whose price is within your credit limit and within your repayment ability, review the purchase one more time. It’s good to take a step back and determine if there are more important needs to which those funds could be allocated, providing you a better standard of living.

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