Credit cards come with various perks and benefits. High credit limits give cardholders greater purchasing power. In addition, the lucrative reward points, various cashback offers, or discounts on shopping sites can make people feel like using their credit cards all the time. As a result, they might end up making expenses that are beyond their repayment capacity. The obvious result of such expenses is overwhelming debt. But by keeping some simple tips in mind, one can avoid credit card debt:

1. Save a certain portion of income as emergency funds
Most people accumulate credit card debt due to various emergency expenses like medical emergencies and other forms of unavoidable expenses. When such an emergency occurs, due to lack of savings, the cardholders are left with no other option than to use their credit card. So, it is advisable to keep aside a part of the income as emergency funds to deal with such situations.

2. Budget
A useful tip to avoid debt is to spend only on those things that a person can truly afford. One can make a budget for their total income and set aside an amount for all expenses. Then, one should only use funds according to the budget to avoid unnecessary expenses. By planning expenses in advance, one will be able to repay their bills on time and avoid credit card debt.

3. Timely payment of credit card dues
Timely payment of credit card dues can help one avoid a large credit card debt. One must keep track of their expenses and make timely payment of their credit card dues. On failing to pay bills for a single cycle, the next bill amount will be a larger sum as it would include payment for both cycles as well as a late fee. If this continues, the due amount will continue getting bigger each time, and ultimately, the cardholder will end up with a huge credit card debt. So, it is advisable to try and make complete payments of credit card dues every month. If this is not possible, even part payment can help. This tip can also help people limit their expenses to only those things that they can afford in a single month.

4. A limited number of credit cards
An effective way to avoid getting into a credit card debt is to have a limited number of credit cards. No matter how much a person can control their habit of spending, having too many credit cards can tempt them into splurging on unnecessary items. In addition, it can be difficult to keep track of all expenses made on all cards, which may ultimately lead to debt.

5. Understanding the terms and conditions of the credit card
One should go through all the terms and conditions laid out by the credit card companies to understand the conditions that will lead to a rise in the rate of interest, or when some additional fees would be charged, or how the interests are applied to their accounts. Being aware of such facts can help a cardholder avoid credit card debt caused by unexpected charges or changes in interest rates.