Today’s post is from a guest writer who contacted me for an opportunity to post her financial wisdom. Good Nelly is a financial writer, who loves to analyze financial happenings and share her analysis with her readers. She has been associated with DebtCC for quite a long time and has achieved Hall of Fame status in the DebtCC Community. She has written articles for other websites, as well. Enjoy!

It goes without saying that you need to avoid debt for a secure financial future. Failing to use credit cards properly is one of the reasons many fall into debt problems.

Research shows that credit card debt has increased in the past few years. In a recent report from nerdwallet.com, in the last quarter of 2015, the average household with credit card debt had $15,762 outstanding on their cards and $130,922 in total debt.

However, credit cards are not harmful to your finances in and of themselves. They have many advantages if you know how to use them properly.

Here are 5 do’s and 4 don’t’s to avoid credit card debt and still use your credit cards. 

Do’s

1. Do plan a realistic budget

The best way to avoid debt is to plan a realistic budget which you can follow with ease. The main idea is to plan the way you spend. Revisit your budget from time to time and make changes as needed.

2. Do read the terms and conditions on your cards

Before you take out a credit card, make sure you read the terms and conditions carefully. Credit card agreements have important information about interest rates, default penalties, late fees, etc. Knowing about these can help you avoid paying fees and high interest rates. Moreover, comparing the terms and conditions can help you take out the most suitable card. Creditcards.com and nerdwallet.com are good resources for comparing credit card offers.

3. Do pay the outstanding balance every month

You won’t fall into credit card debt if you pay the outstanding balance at the end of every billing cycle. By doing so, you can avoid paying the interest charges, and it may also help improve your credit score.

4. Do not delay making the payments

If you are prone to make late payments because you inadvertently let the due date pass, set an alarm in your calendar to make the credit card payments before the due date. You can even write the due dates on a sticky note and stick it on your refrigerator. Whatever it takes to help you remember to make the payments on time.

5. Do keep a record of what you’re buying

When you buy with your credit card, always keep the receipts so that you can check your statement for fraud and/or errors. If you find a mistake or error, contact the credit card company immediately. By law, if your credit card number is stolen, but not your card, you are not liable for any fraudulent or erroneous charges. If your card is stolen, your maximum liability is $50.

Don’ts

1. Don’t swipe for anything you can’t afford

Often people charge a card when they are paying for something they can’t afford. As a result, it is difficult to pay off the outstanding amount at the end of the billing cycle. You pay interest on the amount you carry forward. Between the payments for what you bought and the interest, your balance can quickly grow creating a debt problem.

2. Don’t use your card for making everyday purchases

If you use your credit card for making everyday purchases, it may be difficult to avoid growing your debt. Use cash or a debit card for your morning coffee or other quick cash needs. This will ensure you are only spending the money you have and not letting your debt get away from you.

3. Don’t say ‘yes’ for special services

The credit card issuers sometimes offer special services like credit card fraud protection. Think before you opt for these services since they’re usually overpriced and don’t offer anything you can’t do yourself, like paying attention to charges made to your card.

4. Don’t close a credit card without analyzing the impact

Closing a credit card can hurt your credit score. You shouldn’t close a credit card that has a balance without paying it off. Think before closing a card that you’ve been using for a long time. Closing the card might shorten your credit history and that could have a negative impact on your credit score.

If you follow these do’s and don’ts, your credit cards can be a beneficial tool. They can help you build a good credit record and make life a little easier.