Female Shopping Online

We live in a world run by plastic. Rarely do people use cash to pay for their purchases, as it’s much more convenient to use a debit or credit card. According to a 2018 study conducted by the American Banking Association, at the end of 2017, there were 364 million open credit card accounts in the United States. Rough math shows that 1 in 7 Americans has at least one credit card.

While credit cards are a convenient way to pay for items, if used improperly, they can be a serious thorn in your financial standing. Here’s what you need to know about credit cards, debt, and how these pieces of plastic can help and hurt your progress in achieving financial security.

How Credit Cards Can be Used to Help With Debt

Credit cards can be used for a variety of purposes. They can be used to finance a large purchase or to pay for your vacation through earned air mileage and rewards. Credit cards can also be used for discounts on purchases and for cash back, saving you money each time you spend.

Though many don’t think of it, credit cards can also be used to manage and pay off debt. If used properly, a low or no-interest rate credit card can save you hundreds, possibly thousands of dollars in fees and interest.

Depending on your financial standing and credit history, you may qualify for a low or no-interest rate credit card. Before submitting an application, compare credit cards on sites like Get Out of Debt to find the best card for your situation.

When looking for your next credit card, you’ll want to consider several factors such as:

  • Card requirements for applicants
  • Annual fee
  • Rewards program and/or cash back program
  • Length of promotional interest-free period
  • Interest rate after the promotional period
  • Fees (ie. transfer fee, cash advance fee, foreign transaction fee, late fee, etc.)

By taking the time to find the right card that you’re most likely to get approved for, you can then work on a plan to transfer and pay off debt. When transferring debt onto a low or no-interest rate credit card, be sure that you’re aware of any transfer fee that you may have to pay. Generally, the fee is well worth the money saved by not making payments on a high-interest rate credit card.

The key to transferring a credit card balance onto another card is to always make payments on time. You’ll also need to create a payment schedule so that you can ensure there’s no balance on the card after the promotional period ends. This way you aren’t subject to any fees or interest.

The Negative Side of Credit Cards

No one really opens a credit card with the idea of getting in over their head. There’s nothing worse than not being able to pay the minimum payment each month or having to pay hundreds of dollars in interest because of a balance that you carry over each month.

In the U.S. alone, the average household credit card debt is around is $9,333. While debt isn’t uncommon, carrying a large amount of debt from month to month can cause all sorts of financial trouble and hardships. Credit card debt is often subject to high interest rates along with fees that make paying down the balance even harder.

If you own a credit card, there are must-follow tips if you want to avoid the pitfalls that these little pieces of plastic can cause, namely getting over your head in debt.

First, never make a purchase larger than what you can afford to pay off within the payoff period. If you must carry over a balance to the next payment cycle, make sure you know how much interest will be applied towards the balance.

Next, when carrying a balance, always make more than the minimum payment. Most people don’t read the fine print that comes along with their billing statements. However, these statements provide a breakdown on the amount of interest you’ll pay if you only make the minimum payment. This number alone can be quite eye-opening.

Other tips to make owning a credit card a positive experience include:

  • Have a budget
  • Never go over the credit limit
  • Avoid cash advances
  • Be aware of fees (ie. annual fee, late fee, etc.)

By using a credit card properly, making on-time payments, and only charging what you can afford to pay, you can greatly minimize the risk of falling into the revolving door of credit card debt.


As with any financial tool, credit cards can be used to pay off your debt, or they can be used to dig you into a deeper monetary hole. By making sound financial decisions, you can ensure your credit card doesn’t turn into a debt trap.