Most debt is incurred with large purchases, like big televisions or expensive vacations, so if you just keep those big charges in check, you will be fine, right? Wrong. In fact, for many people, debt sneaks up after using credit cards for small purchases. The following are debt myths and facts that will help you get your finances under control.
Get the facts on these debit myths to take charge of your charging:
Myth: You do not need a budget if you pay attention to your spending.
Fact: How much do you really spend every day? Although the answer to that question will fluctuate based on various factors, you may be surprised to discover where your money goes.
Setting, and sticking to, a budget will ensure that you understand your spending habits and will help you get your debt under control.
Myth: Nobody carries cash anymore.
Fact: Remember actual, paper money? Thanks to a culture that makes credit so easy, some people rarely carry cash anymore. But relying on cash more often than credit helps you understand how much you are spending.
Using cash instead of a card can be a good option for people who have a difficult time keeping track of their spending. It is easier to realize you are running out of money to spend when you can actually see the dwindling stash of bills.
Myth: Using a credit card is better than using a debit card.
Fact: If you can keep on top of your budgeting, use your debit card instead of your credit card so that any purchases come directly out of your account instead of adding to your debt load. Be sure to keep track of your account balance to avoid overdrawing your account.
If your main goal is to get your credit spending under control, using a debit card can be an excellent choice for daily purchases.
Take control
If you cannot pay your credit cards in full at the end of every billing cycle, take a moment to think about whether that purchase is worth the extra money you will be paying in interest. Once you can separate the facts from the debt myths, you are in a good position to take control of your finances and avoid unnecessary debt down the road.
Want more strategies for handling debt and taking control of your finances?
Download Cobalt’s free e-book, The Debt Management Guide.
