How to Manage Credit Cards and Avoid Debt?


Reading Time: 3 minutes

Before BNPL came along and made the buying experience invisible, it was credit cards that started shaping the shopping paradigm of people. But higher purchasing power also needed to be balanced with steps to manage credit cards.

A credit card is much more than a cash substitute. This uninterrupted buying experience often makes us overlook this factor, leading to unforeseen additional charges, debt traps and other potential risks.

Table of Contents

  1. Have a budget in mind
  2. Know when you can pay and stick to it
  3. Be mindful of cash withdrawal charges
  4. Read the Fine Print
  5. Beware of your credit score
  6. Explore efficient EMI options when making purchases

6 Steps to Manage Credit Card Payments and Debt

1. Have a budget in mind

Create a budget and stick to it. Yes, credit cards can be empowering, but without having any bar on your spending and, they might turn overwhelming. 

You could explore various budgeting methods such as the 50/30/20 budget, pay-yourself-first budget among other methods. You can ascertain patterns in your spending habits and plan for the future as per your needs. Without tracking, it gets difficult to stick to a budget, especially when it comes to credit cards. You could also keep an eye on credit card statements to simplify the process.

2. Know when you can pay and stick to it

Alongside having a specific budget, it is also important to have a far-sighted notion of your financial conditions. So, let’s say, you borrow a lump sum on your credit card this month without taking into account the expenses of the upcoming months. The result is increased interests or securing an even larger loan to pay off the debts. 

This is a financial backtrack you don’t want. Hence, be mindful of when you need to pay off credit card debt and ensure you pay it before the due date. Also, minimum payments may seem like a convenient way to pay credit card bills, but they are not. The charges that follow are much higher and it’s always recommended to pay off credit card bills completely.

3. Be mindful of cash withdrawal charges

Cash withdrawal charges often vary from one bank to the other. Therefore, before it starts becoming a hidden cost on all your withdrawal transactions, make sure you are thorough with all the related charges.

4. Read the Fine Print

Credit cards are often replete with lucrative discounts and cashback offers but with certain conditions. This is why it’s incredibly important to carefully sift through all the rules and terms of availing a particular discount instead of making a rash transaction. Not all offers may be beneficial for you and only a sharp observer can walk the line between what the costs seem and what they turn out to be in reality.

5. Be aware of your credit score

Never forget to pay heed to your credit score. It is a numerical representation of how well you manage your debts and loan repayments. In India, low credit scores often spell a death knell for furnishing loans at lower interest rates.  

6. Explore efficient EMI options when making purchases

EMIs are a highly efficient and flexible way of repaying loans as it divides a large sum into smaller instalments. First, it helps you maintain a definite budget for your expenses. Second, EMIs come with lower interest rates.

Most importantly, it relieves you of the payback anxiety as you are confident in your ways of spending and borrowing.  The only downside here that you need to take care of is to not exceed your credit card balance, as that would again disrupt your personal budget.

Concluding Thoughts on How to Manage Credit Cards

Credit cards are used quite often by many users, given its benefits. But we must be aware of related charges and costs before using them. In the end, consistent monthly paybacks of loans is the harbinger of sound financial health. So, the next time you swipe your credit card, do so with all these points in mind. 


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