Credit Card Debt: The Risks and How to Avoid Them

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Credit card management can be smooth with careful planning. As a result, people making purchases choose this method as a preferred mode of trade.

However, many dangers come with its use, and if left unchecked, it could lead to spiraling debt levels, leaving you in a deep financial hole.

What Are the Dangers?

Interest Rates

Credit card interest rates are high, especially when the due date passes. They attract rates of between 16% and 25%. The rates continue to hike daily, and you may end up paying a rate you had not expected or bargained for. The notion that interest will be determined monthly is a false assumption. You should be knowledgeable about working out the rates.

Damaged Credit Score

Your payment record will affect your credit rating. It could negatively affect your loan’s credibility in the future. Other loans and mortgages, as well as simple things like rental applications, will be affected. Loan lenders will find it hard to trust you if your credit score is poor.

Minimum Payment

There is the allure of putting off paying your credit card balance by submitting a minimum payment each month in case you are not in a position to make a full payment.

While this may appear to be an easy way out, it is a trap that will keep you digging deeper into your pocket in the long run. This will only cover the fees and interest rate, leaving the premium the same for each recurring month.

Late Penalties and Fees

Making a late payment will also attract separate fees from those for missing a payment. All aggregated fees will be substantial, leaving you in deeper financial trouble.


With constant debt obligations hovering over your head, you are bound to have stress and anxiety. This can be tortuous and leads to dealing with pressure when payments are due.

You dread simple tasks like receiving a telephone call, which causes you to become jumpy all the time! You feel like everyone approaching you is a lender out to collect.

This will cause mental anguish when the spiraling fees and penalties overwhelm you. It may eventually affect your mental health.

How to Avoid Credit Card Debt

Avoiding credit card debt will take financial discipline.

There are ways you can overcome the credit card burden and spend your way to financial freedom.

Here is a rundown of avenues to this freedom:

  • Have a clear budget to enable you to stay on top of your financial management. You should spell out a logical goal for income and expenses, including any debt obligations. You will be ahead by avoiding overspending.
  • Live within your means and plan on paying any existing credit card debts. Prioritize paying in full each month to tap into gains like reward programs. Always make a payment that is above the minimum. This will minimize interest charges and help you pay the debt faster.
  • Don’t charge your card for every purchase, including impulse purchases. Be prudent and use it only on purchases that are within your spending scope and that you can comfortably pay off in the shortest amount of time.
  • Using the card for cash advances is tempting, but you should avoid it as it has high-interest rates and a quick accumulation of debt. Try using the card for purchases only.
  • To help you avoid many inconveniences, set up auto-pay for your card. The standing instruction will save you the headache of trying to remember when to pay, thereby avoiding penalties for delayed payments.


You may have landed in a financial pit because of the dangerous use of a credit card, but there are ways not only to get out of that mess but also to help you save and build wealth. Proper use of a credit card can be a great tool for financial management. It can also be a great impediment to financial growth if used dangerously.

Know why and when to use it, and meet your payment obligations in time to maintain your financial and mental health. Avoid all the dangers of credit card debt.

What are your thoughts? Leave them in the comments section.

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