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3 mistakes people make that result in credit card debt

For many young people, getting a credit card is a rite of passage into adulthood. Unfortunately, many people are never taught how to properly handle money and end up struggling to keep up with mounting credit card debt. Here are three of the most common mistakes people make with credit cards:

  1. Signing up for a credit card with no real income. Many college students and adults with limited incomes fall into this trap. They think that having a credit card is a smart way to pay for books, food, personal items and other expenses they have. But the truth is that unless you have an income, it makes absolutely no sense to sign up for a credit card because it won’t take long to fall behind on bills.
  2. Co-signing for family or friends. When you co-sign for a card, you’re agreeing to be responsible for all credit card debt in the event your loved one can’t continue making the payments. Are you really willing to take on credit card debt you didn’t run up, or ruin your credit because you can’t afford the payments?
  3. Using credit cards for everything. Charging up a lot of stuff you know you can’t afford is just dumb. Put off making purchases until you have the cash to pay for them. If you can’t help yourself and have a real problem controlling your spending, get help from a debt counseling firm. You may need advice on how to deal with emotional issues that are contributing to your financial problems.

The best way to avoid credit card debt is simply to not use credit cards. Save up enough cash for your purchases and contribute to a savings fund for unexpected expenses.

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This entry was posted on Saturday, October 2nd, 2010 and is filed under Debt Consolidation. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
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