• Tammi

Saving Yourself From Credit Card Debt


With the culture of consumerism, credit cards have become a staple in our lives. A credit card is a financial tool, and if used correctly, it can be your best friend. Credit cards offer attractive benefits such as convenience, they can help to build a good credit reputation, and they allow access to emergency funds. However, if used incorrectly, it can become your worst enemy.

A simple definition of credit is the ability to consume goods and services today, and pay for them at a future date. A credit card allows you to use the issuer’s money and repay them at a later date. For some, this is viewed as free money, when it really isn’t.

As an ex-teller, I’ve heard a variety of complaints:

“Why can’t I get my balance to go down if I pay the minimum payment each month?”

“Why are there so many fees on my account, I didn’t know credit cards came with fees.”

There are so many people who cannot free themselves from the debt of misused credit cards. Here are a few basics that can help you use your credit card wisely.

  1. Credit cards are NOT debit cards. Sure, you can swipe both of them at stores, you can use them at ATMs, and you can use both of them to shop online. With so many commonalities, remember that they are very different in nature. When you swipe a debit card, you are using your personal funds from your personal bank account. However, when you swipe a credit card, you are not using your money; you need to pay it back, normally with an interest rate attached.

  2. READ the fine print! I understand that it’s exciting to obtain a credit card for the benefits that it brings. In all of the excitement though, remember to read the contract and policy agreements. You’ll find all the fees and penalties in the contract. Interest rates, late payment fees, annual fees, and cash advance fees add up over time. Most issuers charge a whopping 18% on your credit card balance! Don’t get caught off guard because you didn’t read. If you’ve read the contract and don’t understand, don’t be afraid to seek clarification before signing up for a credit card. It may save you unwarranted headaches in the future.

  3. Pay more than the minimum payments! If your balance is $1500, it’s relieving to know that the minimum payment is only $75.00. However, paying only the minimum payment on your balance is the slowest and most expensive way to pay off your debt. Interest adds up over time, and if you make the minimum payments, you’ll never pay off your debt (or at least that’s how it will feel). If you can afford to pay the entire balance, even better! You’ll save yourself from unnecessary debt.

  4. Never spend more than you can afford! I’m not talking about using your card for emergency situations. I’m talking about using your card lavishly spending on shopping sprees, spa days, expensive restaurants, and treating yourself to things you know you cannot afford. This is an easy way to find yourself buried in debt.

  5. Use your credit cards safely and wisely. Credit card fraud is real! Be careful where you decide to use your card. If you receive an email about helping a stranded person in Nigeria, it’s probably not a good idea to use your card to send funds. Also, research online stores to check their reliability. Be proactive by regularly checking your statements, signing up for online banking helps with this. Immediately notify your bank if you’ve noticed anything out of the ordinary on your statement.

Hopefully these tips can help you to use your credit card wisely, safely, and economically.

About Tammi

Tammi Miller is a young finance professional, with a BBA in Banking and Finance from the University of The Bahamas (formally The College of The Bahamas) and an MBA in Economics from Beijing Normal University. She is goal oriented, adventurous, and sometimes funny. Tammi currently works within the financial sector in The Bahamas and is extremely passionate about teaching others to become financially literate. 


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