How to Avoid Falling into Credit Card Debt (10 Steps)

Step 6. Limit the Number of Credit Cards You Use

Having multiple credit cards can help your credit utilization ratio — but too many can also encourage overspending.

Why multiple cards can be risky

• It’s easy to lose track of balances and due dates.
• You might feel tempted to spend more because of higher available credit.
• Each new card can trigger a hard inquiry, temporarily lowering your score.

How to stay in control

• Stick to 1 or 2 main cards you can manage comfortably.
• Close unused store cards or high-fee cards.
• Use one card for bills and one for rewards if necessary.
• Keep total utilization below 30% across all cards.

Example:

If you have £10,000 total credit limit, avoid using more than £3,000 at any given time.

Step 7. Avoid Cash Advances and Payday Loans

When you use your credit card to withdraw cash, you’re entering one of the most expensive forms of borrowing.

What’s wrong with cash advances

• Interest starts immediately — no grace period.
• APRs are usually higher (often 28–35%).
• There’s an extra cash advance fee (around 5%).

Payday loans are even worse — short-term, high-interest traps that can create a cycle of debt.

What to do instead

• Build a small cash reserve for emergencies.
• If you’re short on funds, call your creditor to request a temporary payment extension.
• Use low-interest personal loans instead of advances if absolutely necessary.

Tip: Using a credit card to get cash is like borrowing money at emergency-room prices. Avoid it entirely.

Step 8. Pay Attention to Credit Card Fees

Debt isn’t just caused by interest — hidden fees can make it worse.

Common fees to watch

Even small fees can add up to hundreds per year — especially if you carry balances.