3 Best Practices for Avoiding Credit Card Debt

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Credit Cards may have their perks and benefits, but with that also comes the freedom to spend money that you may not have at the time. If not handled responsibly, credit cards can damage your financial independence by accumulating debt.


Budgeting is a simple and effective process that involves developing a plan for every dollar you have. This tactic can allow you to achieve structure and minimize stress. If you are prone to quickly spend your monthly income and live paycheck to paycheck, it can help to put aside a certain amount of money for the things you need.

Budgeting your monthly income could be an ideal practice for transforming your financial state of well-being. There is a common strategy known as the 50/30/20 rule that directs your monthly income to these areas:

  • 50% of your income for needs, such as housing and transportation
  • 30% of your income for wants, such as eating out and entertainment
  • 20% of your income to savings and debt repayment

Limit Your Amount of Credit Cards

Each time you apply for a new credit card, a credit inquiry will appear on your credit report. To keep the inquiries at a reasonable level, try to only apply for credit as needed and not more than once every six months. Take advantage of pre-qualification forms, which allow you to check whether you may qualify for a credit card without showing up as an inquiry on your credit report. We also recommend doing adequate research about credit card options before applying for them.

Make Frequent Payments

Missing payments and failure to pay off your monthly credit card balance can put you at risk of accumulating debt. To avoid this potential outcome from missing payments, we recommend setting reminders on your smartphone or utilizing the automatic payments feature from your bank account. By paying off your credit card on a monthly basis, you can avoid interest altogether and build a positive credit history. Many financial institutions offer rewards that people can take advantage of.

At Camino Federal Credit Union, we offer our members perks and benefits in the form of our Visa Platinum with Rewards Credit Card. This credit card gives you the opportunity to earn 1 point for every $1 purchase you make.

Avoiding debt can be challenging. Our team will work with you to ensure you receive the personal support you need. You can contact us at caminofcu.org or give us a call at 800-835-3400.