How to Avoid Credit Card Debt

In modern day society we are accustomed to having what we want when we want it, and trying to keep up with the fast paces of life and consumer society of play havoc on our bank accounts and pocket books. The perceived need to have the latest computer software, the latest looks in leather jackets, and the hippest car frequently drives us to a point of overextension and financial insanity. Instead, we should take a step back and look at what we have instead of what we think we need.

For instance, two years ago you bought yourself a new laptop computer. Your laptop has a CD/DVD burner combo drive, is light weight, and upgradeable, but you suddenly feel that your system does not have enough “bells and whistles” because you do not have an internal card for wireless internet access or your graphics are the standard version instead of extreme graphics version two. Hence, you feel the burning need to dump your current laptop and purchase a new one. But, do you really need that new laptop? No, the upgrades for your current one would cost you a fraction of the price, and drivers for your graphics card are easily downloadable (and usually free or minimally priced). Yet, you still believe that you need a new laptop because yours is no longer displayed on store shelves, and you subconsciously believe that upgrading your laptop (over buying a new one) is settling for second best. But, you are not settling. Instead, you are being prudent and consumer conscious – prudent because your laptop is still running smoothly, is internet adaptable, and is compliant with commonly used software and consumer conscious because you know that holding out for another two years will prove wise for your next major laptop purchase. After all, laptops generally have a lifespan of four years, and waiting two years will enable you to buy a laptop will a DVD/CD burner, extreme graphics, and more bells and whistles than are currently on the market. This latter fact is common knowledge on the market, and any one who has ever purchased computer equipment on a whim can tell you how they spent more money than needed on the spur of the moment buy.

This scenario, of desperately needing a new laptop because yours is becoming “outdated,” is a classic example how many individuals rack up credit card debt and make purchases that they do not need. The prudent consumer, who purchased upgrades over a new system, would have saved approximately twelve hundred to one thousand dollars on their computer system-thus, enabling them to apply that money for other needs/desires. These needs and desires could be real-like new tires for the family car-or they could be imposed-like the longing to go away for a weekend at a nearby beach resort. Again, the new tires for the care are a safety factor, and the beach front vacation is a luxury. Credit card spending on either purchase should be avoided, but if credit use is needed opting for new tires is the safer investment. And yes, credit spending for new tires (or any item) is an investment because you are paying back the money loaned with interest. Average credit card holders spend ten to twenty years paying off credit card debt, on basic monthly payments, that they procured in their twenties. This long-term payment system is an investment because the items you bought are slowly being paid for-often long after you have discarded them-and their end price is considerably higher that what was initially paid. Thus, your investments onto credit cards should be well thought because they will not be paid off for several years. Your purchases should be well thought and considered with a heavy heart.

Placing purchases on credit cards should come from heavy heart because you really need to ponder if you absolutely need that item. More importantly, paying off a vacation or a new article of clothing ten years down the road seems a little ludicrous. By the time you pay off these purchases, many of them will be forgotten and the items will have dissipated from your possession. Thus, weigh the need and desire for purchases heavily, calculating the interest that you will pay, and the amount of enjoyment or productivity that will derive from them. Tires for your vehicle-those are a must have purchase, and putting them on your credit card is not a major financial infraction. Well, that is unless you are putting the tires on your credit card so that you can use your cash for an upgraded car stereo system. This choice would also fall into the disillusionment category because using credit for tires so that you can make a luxury purchase is the equivalent of putting the luxury item on the credit card. Robbing Peter to pay Paul never works . . . and do not fool yourself. It will not work for you either. Accordingly, before making a credit purchase weigh it wisely-do you need it or desire it!

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