Avoiding Credit Card Debt

Nolo, November, 2006

Credit cards can be a great thing -- they're convenient, can help build good credit if used properly, and are useful in emergencies. But they can be dangerous, too. Because you can charge more than you can afford and make very low monthly payments, the temptation to overspend is tremendous. That, combined with credit cards' extremely high interest rates, cause many people to spiral into debt.

To avoid becoming one of the millions of Americans struggling under a huge amount of credit card debt, learn to use credit cards wisely. Here's how. Don't Use Your Credit Card as a Loan A credit card can be two things, depending on how you use it. If you carry a balance, it is a very high interest loan. If you make only the minimum payment (usually 2-3% of the balance) each month,...