Credit cards are handy and can make payments of your unexpected bill easier. A credit card can also be your saviour when you are in urgent need of money. One can use a credit card to pay bills, purchase goods or any types of equipment. One can also get cash advance by using a credit card. Credit cards help you to fulfill your needs even when you are out of money, making them even more tempting.

And since, credit cards are so tempting, it is easy to fall into a credit card debt. Credit card debts are worse than any other debt as the interest rate charged on a credit card use varies from 12% to 36% per annum.

The e-commerce market is flourishing at a great extent, providing irresistible offers and making sure that you’re shopping stress-free on the use of credit cards. But what people don’t realize that using a credit card for expensive purchases will cost them much more than the actual price. This high price will drown them in accumulated interest, as the interest payable on the card will just start after one month and the circle will go on.

When to Get Rid of Your Credit Card

1. All Your Money Goes Toward Debt

Before you use your credit card first calculate how much you spent on debt payments last month. Pull out your credit card statement. Compare this to your monthly income. Remember the debt payments should not exceed 36% of your gross monthly income.

But in case you are spending 50% or more on the debt payments every month, then it’s time to make some financial adjustments.

2.  Using Cash Advances on Your credit card

Using a credit card for cash advance when you are out of money is so expensive. On doing so you will be charged a fee, along with the interest rate.

Hence, it is never recommended to use a credit card for a cash advance.  If you are in such a situation try to go with other options. Cash advances from a credit card is a clear indication that you are not managing your finances well. Think wisely and consider closing your credit card to save more every month.

3. You Buy on Impulse

Impulsive shopping is a major reason to get you into credit card debt.

If you’re a shopper and not careful but the consequences of frequent credit card use this get you into major trouble.

Impulses to buy things on a credit card can lead you into major debt. To avoid doing so always keep a record of your credit card uses, this will help you to analyse how much you spend.

If this is not helping you out, then the best option is to get rid of your credit card. This way you will be limited to the money in your savings account.

Good personal finance management is always important, things include habits such as budgeting your expenses monthly or having a spending plan in mind can also be somewhat helpful.

4. You Think You’ll Win the Lottery Overnight

It’s totally a gambler’s mentality to believe – you’ll find a way out of paying off debt. People with such mind-set never stop using a credit card which results in bigger and bigger debt. When they realize that they are in a bigger debt which they cannot clear, at that moment they go for another debt to clear the debt of credit card. This becomes a trap and never-ending process. Hence, financial planning is very important at each step of life.

5. You Missed a Minimum Payment

If you missed paying the minimum monthly payment, it’s a red sign indicating you are in danger. It’s high time, start budgeting quickly. You can take advice from experts. Also, there are budget counsellors who can help you and can find a way, and make the impossible possible by their advice.

You have to streamline your finances and to start paying off your debt more efficiently. Missing credit card payments is a clear indication that you are on the wrong track, and you need to be on track soon.

6.You Worry Constantly

Last but not the least- If your credit card debt is the cause of your worry and anxiety, it’s the high time to take action and find a solution for your worries. Start managing your finances, take actions.

7. You Don’t Use Your Credit Cards or Seldom Use Them

It is good to have a credit card with you all the time. This way you stay covered for urgent expenses.

But, if you are one of those individuals, who are good at money management, and hence doesn’t need to use credit cards, then you need to get rid of them. Holding on to a card will attract you annual charges and non-usage charges as well.

If you have a really good financial backup and credit score, then maybe you should close your credit card(s). This will help you to improve your credit score by reducing the open credits in your name.

To Conclude

Don’t avoid the above-mentioned signs. Even if you are suffering from one it’s a serious issue. We aware, start managing your finances wisely. It’s never too late to initiate a good thing. Start now, you can end up with all your debts soon.