credit card debt avoidance

 How to avoid credit card debt has recently been the major concern of many household. The truth of the matter is that a lot of people do not know what to do in order to avoid being trapped in credit. This hub is written to give you some sound financial management tips that when applied will help see you and your family out of the credit crunch that you might think will never be over.

There is this African saying “you cannot go to the stream with basket and expect to come back home with water”.

Same goes to personal finance and debt management. A lot of people struggle to come out of debt and still blindfold themselves from the cause of their problems.

You must surely go bankrupt over and over (within the limits of the law) as long as you don’t amend your spending pattern and habit.

Credit card marketing company and their agents fine tune their marketing strategies to help you go further into debt. They offer mouth watering bonuses like; spend up to xyz amount in one week and have your interest rate cut by xyz rate.

They encourage you to keep accumulating debt and inviting bankruptcy and its uncomfortable and unpalatable consequences by accepting to be kept at bay with minimum periodical debt repayment.

These credit card companies and their agents forget or intentionally fail to educate you on the phrase “compounding interest”. They subtly hide their effective interest rate from you and still encourage you to create more holes in your personal finance pocket.

Many young people get into debt they cannot repay in the next 10-15 years of active work and full employment before they graduate from school. The simple reason is because; the credit card companies encourage them to go deeper into debt. Thereby entangling themselves in what Kiyosaki called rat race or face the reality of the negative psychology of bankruptcy.

The only one easy and stress free way I know to escape bankruptcy and become debt free is to plug the holes created in your personal finance pocket by the forces of “sugar coated tongues” of marketing companies – especially credit card companies.

In this article are some simple advices that can help block those holes in your personal finance pocket if followed religiously. BINGO!

• Developing a thick skin towards the various strategies that marketers employ to lure you into spontaneous buying.

Learning to say no to things you don’t have need for at the present time will help you stay debt free and remain debt free.

• Educating your self on the basics of personal financial planning and financial management.

Understanding concepts like; time value of money, future value, present value and annuity will help you understand some of the legal tricks of credit card companies.

• Having a working budget.

Is as simple as this, hey guys I want to be spending xyz amount every week, month or year and stick to it. The only difference is that you have to put this into writing. You can seek the service of financial planners to help you out on this aspect. In case you don’t know how to go about selecting a financial planner, this article will give you useful insight.

• Acting as your own personal forensic financial manager.

Of what benefit will it be if you have a wonderfully drawn budget or financial blue print without having it implemented? You will agree with that the aim of drafting a budget and financial plan will be defeated if not acted upon. A little discipline is required here. Nobody will police you except YOU!

• Throwing away all your credit cards – leaving one only for emergency situations.

This is self explained, if you really want to escape the baits of these credit card companies, one card will be enough for you and make sure it is used only in state of emergencies.

• Delaying immediate self gratification.

Someone will say “true success is your ability to delay immediate self gratification”. Do not say because your peers are doing it and then jump into it. Always ask ‘does it fit me?’ the fact that your friends are buying cars and mansions they don’t need does not make it right for you to do same.

• Saving a specified percent of your income.

I recommend that you save at least 15% of your income. And this will smoothly translate us into the last tip I will be giving in this article.

• Stimulate your appetite for investment.

There are numerous investment vehicles that can safely and successfully drive you to the lifestyle that you so much desired- a life devoid of bankruptcy and bad debts (debts that does not bring you returns).

You can take advantage of this economic recession to buy into (shares of) companies that have potentials.

I have no doubt in me that this article has added more knowledge to your already enriched knowledge bank. So, why don’t you join me in the campaign to making this our generation a bankruptcy/ bankrupt free generation by sharing this article your loved ones?

To your debt and bankruptcy free life!