Tips to avoid bad debts

Are you having a bad debt? Are you a high income employee but your bank saving seems less due to credit card debt? I believe a lot of employees nowadays are having same problem especially those who are after graduate and with a new job then eagerly sign up a credit card agreement. No doubt it is really fantastic that buying something without taking out your cash from wallet. With a card on hand, you will not feeling any difficulty unless the cost is out of your maximum limitation. This is similar with when you are in the casino and you are holding a bundle of credit chips. Most of all, you will not feeling sad at the moment if you lose $1000 for only two color chips. It is psychological effect illustrate you mind to be temporarily forget value of every betting. Oh, I am not at here to talk about gambling. However, I would like to share some tips on how to prevent yourself in getting a bad debt.

Two years ago, when I was graduated with an outstanding result of Electrical Engineering Degree. I was hired by a famous company in Silicon Valley. At that time as usual as other friends, I have signed up a credit card application and get a platinum card in two weeks. I was in the cloud 9 with the shopping satisfying experience. Two months later, I realized that my income was almost used to pay the credit payment at the end of the month. I started to worry about my plan to buy a 3 series BMW. I knew I was out of control in spending money. I knew I was not discipline in personal financial planning. Therefore, I drew a table to categorize where should and should not spend with credit card.

This was the credit regulation table after terrifying with the long list of credit statement.

Expense with credit card – transportation, rental, monthly compulsory bills payment.

Expense with cash – food, household, sports, shopping.

Monday to Friday- carry credit card.

Saturday to Sunday – intentionally do not carry credit card

I have 5 ways to restrict myself :

• lower the credit limits to $1000
• glue a 3 series BMW picture on my wallet where I can see when open my wallet.
• always forget to carry credit card before going to shop.
• ask girl friend to carry on behalf of me.
• change an ugly physical looking credit card.