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How to Avoid Debt When Using Credit

It might not be banned from everyday conversation, but sometimes it feels like "debt" is a taboo four-letter word — especially when you aren't careful about managing it. Using credit is an effective way to build your credit profile, but it can also become a problem if you're not careful. Check out these crucial tips for using credit wisely as you get started building your financial profile.

Only Charge Things You Can Afford

Having credit doesn't give you free reign to go off the rails with your budget. It's easy to splurge a little here and there when it's not coming right out of your bank account, but if you buy things you can't afford to pay cash for, you may end up accumulating debt and struggling to pay it off. Ideally, you want to pay your balance off in full every month. That's especially true if you want to use credit without getting into debt. Keep that in the front of your mind every time you pull your plastic out of your wallet.

Beware of Debt Traps

We're big believers in using credit wisely. But what does that mean? Tips for recognizing the traps that lead to serious credit card debt include:

  • Using your credit to purchase everyday necessities like food and gas. If your budget is stretched to the max, it's time to revise it so you're living within your means.
  • Transferring balances to avoid making payments. Sometimes taking advantage of balance transfer offers makes sense (hello, zero-percent interest rate for 18 months). But if you're using it as a strategy to avoid paying down balances, that's a red flag.
  • Skipping payments all together. If you're skipping a payment on one card to pay the minimum on another, you're in trouble.

Build Your Emergency Fund

Give yourself a cushion and you'll always have a soft place to land. Having an emergency fund that can help with several months' worth of living expenses if you lose your job (or cover major vehicle repairs or medical expenses) is essential. Without it, you may have to use credit for large expenses that you might not be able to pay off quickly. That's a good way to end up with debt that you can't manage.

Don't Let a Good Thing Go Bad

Using your credit cards is a great way to nurture your credit score. But if you're not careful, you could easily make money mistakes that don't just leave you in debt, but can also lower your credit score. Some of the top mistakes that people make include:

  • Missing payments: Being 30 days behind can drop your credit score.
  • Paying less than the minimum: If you don't meet the minimum payment required, your payment will be considered late.
  • Maxing out your cards: Using up all your available credit can drop your score dramatically.
  • Applying for multiple cards: Trying to get lots of cards within a short time leaves lenders thinking that you're on a binge.

Use credit wisely and get the money you need with a loan from AmeriCash Loans. Don’t worry if you don’t have the best credit, we can still help you get a loan. Just call us at 888-907-4227 or apply online at

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