How to drastically minimize the risk of accumulating credit card debt

Nothing beats having financial restraint and discipline. I mentioned in a previous article that getting in the Miles Game should not mean that you have to spend more than you already do.

We are exposed to counts of movies, TV shows and online articles telling us about how credit cards are bad for us and that we should avoid them totally to prevent ourselves from getting deep into uncontrollable debt. Don’t get me wrong, this true; you will not get into credit card debt if you do not own credit cards, right? However, they are also assuming that every one is an irresponsible spender. The opportunity cost of not taking advantage of credit card benefits is huge, in my view.

Over the years, whenever I shared my credit card benefits with people, most of them were reluctant and intimidated because of the credit risk that I mentioned above, and rationally so.

Today, I will be sharing some rather drastic measures that you can take to dramatically reduce your credit risk:

Set your preferred credit limit

Instead of letting the bank decide your credit limit, it is much safer to set your own. This will decrease your credit exposure and hence keeping a good credit score.

Pre-pay your credit cards

You are allowed to pre-pay your credit cards before spending to prevent bill shocks. This essentially turns your credit card into a ‘debit’ card as you are spending money that you already have in the account.

Pay your credit card immediately upon spending

Another way to be very safe is to pay your credit card immediately after every big spending.