Are you someone who has the habit of splurging with money? If you are into the habit of whipping your plastics for every single purchase, you should immediately realize this is going to lead to indebtedness in the long run. Taking on more debt than what you can afford is the biggest issue that you need to fight with when you’re using your credit cards. Over-indebtedness can lead to serious consequences like bankruptcy that can trash your credit score and make you unworthy of getting new lines of credit in the near future.

  • Follow a budget: There is no chance of over-indebtedness when you strictly follow a budget throughout the month and keep a close track on your income and expenses. You just have to ensure making required changes to your budget so that you can adjust it with your changing financial needs.
  • Don’t take more debt than what you can afford: You should know your affordability so that you can take on debt that you can afford on your own. The more you keep on whipping your plastics and incurring debt, the more you will be in a mess in the near future.
  • Stop using your credit cards: Using cash for buying goods is the most vital way of avoiding over-indebtedness. Lock your cards at home so that you don’t get tempted to use them while you’re in the grocery shop. Stuff your wallet with enough cash and use it only after assessing your affordability.

Therefore, when you wish to avoid over-indebtedness, you might follow the steps mentioned above. Get on top of your finances and live a debt free life so as to avoid a bad hit on your credit score in the long run.

Allen 1About the Author: Allen is a financial writer and blogger. He works in a CA based Law Firm. You can follow him in his personal blog: Toxic Finance