Anyone who has a credit card risks carrying too much credit card debt. Once you've accumulated too much credit card debt is can take several years and lots of sacrifice to pay it off. As you use your credit cards, keep these tips in mind to avoid credit card debt.

Have an emergency fund.

You don’t want to get overwhelmed with credit card debt because it can be extremely difficult to repay. Fanatic Studio / Getty Images Many people create credit card debt after a major car repair or medical expense. They were forced to pay for the expense with a credit card because they did not have any access to savings. Having an emergency fund helps you avoid credit card debt by providing you with cash to use when an emergency arises.

Charge only what you can afford.

Avoid the mistake of using a credit card to buy things you really can’t afford. You can avoid credit card debt by purchasing only what you can afford to pay for. Here's a general rule to follow: if you can’t afford to pay cash, you can’t afford to charge it.

Avoid unnecessary balance transfers.

Don't transfer balances from card to card to avoid your due dates. If you transfer a balance to another credit card, have a good reason, like taking advantage of a lower interest rate. Otherwise, your balance will simply increase because of the balance transfer fee.

Don't miss credit card payments.

Staying on track with your credit card payments is one of the best ways to avoid credit card payment. Once you miss a payment, your next payment due will be much higher since you'll have to make two payments plus pay the late fee. It gets tougher to catch up, puts a strain on your budget, and tempt you to use your credit cards to make ends meet.

Pay your balance in full each month.

If you want to avoid credit card debt, pay off your credit card balance every month. That way, you’ll never carry a balance and completely eliminate the risk of getting into credit card debt. You never have to worry about whether you can meet the minimum payment because your credit card has already been paid in full. Of course, this means you can only spend as much as you can afford to pay off in a single month.

Know the signs of credit card debt.

Many people end up with credit card debt because they didn’t realize they were on the way. If you recognize the early warning signs of credit card debt, you can avoid going into debt altogether. For example, being unable to pay your full balance is a sign that you're headed for credit card debt.

Avoid cash advances.

Cash advances are one of the worst ways to use your credit card. If you have to use your credit card to get cash, you're likely facing some financial trouble. Otherwise, you'd withdraw cash from your bank account. A cash advance usually is one of the early stages of credit card debt. Work on fixing your budget and

Don't lend your credit card.

When someone else uses your credit card, you have no control over how they use it. Even if that person says they’ll pay your credit card bill, you are ultimately responsible for the charges they make. That means, if they go on a spending spree and refuse to pay up, you'll have to pay off the balance.

Understand your credit card terms.

Read through your credit card agreement and make sure you understand how interest will be applied to your account, when will you be charged a fee, and when does your interest rate go up. Understanding these features of your credit card can help you avoid credit card debt because you understand how using your credit card costs more.

Limit your number of credit cards.

The more credit cards you have, the more you can charge. You may have great self-control, but it’s better that you don’t tempt yourself with thousands of dollars in available credit. Cut down on the number of credit cards in your wallet to avoid credit card debt.


Christmas is not an emergency. December comes the same time every year.Why are we stressed financially at Christmas when we have all year to plan for it? We know it’s coming!

Let’s have this year be a stress-free holiday. I’ve been there – super tight in December (even hoping I get monetary gifts from my family to make up for the stretch of buying gifts). I’ve never gotten into debt for Christmas (because I’ve never had a credit card), but it’s still a pretty bad feeling being tight around such a wonderful time of year. I am committed to have stress-free and debt-free Christmases every year. And you can, too!

Save or borrow?

If you want to buy something which you can’t afford from your everyday money, you will either have to save up for it or borrow. Deciding on the best option will depend on your circumstances.

Where possible, it's usually better to save than borrow. There are several reasons for this:

The cost of borrowing. You usually have to pay interest when you borrow money, be it a loan, overdraft, hire purchase or credit card. Exceptions to this include interest-free loans from family and friends, interest-free credit from stores (in which case check the small print to make sure it really is) or if you pay off your credit card bill in full each month within the interest-free period.

If you save money in a savings account, it will earn interest. So if you save ksh 5,000 you will also have interest on top of this. The amount of interest depends on the AER interest rate paid and how much you have in the account each time interest payments are calculated.

If you save rather than borrow, you don't have to worry about how you will repay the loan.

If you buy something with your own money rather than on credit, you will own it outright straightaway.

Sometimes the hardest thing about saving money is just getting started. It can be difficult to figure out simple ways to save money and how to use your savings to pursue your financial goals. This step-by-step guide to money-saving habits can help you develop a realistic savings plan.

i. Record your expenses

The first step to saving money is to figure out how much you spend. Keep track of all your expenses—that means every coffee, newspaper and snack you buy. Ideally, you can account for every penny. Once you have your data, organize the numbers by categories, such as gas, groceries and mortgage, and total each amount. Consider using your credit card or bank statements to help you with this. If you bank online, you may be able to filter your statements to easily break down your spending.

ii. Make a budget

Once you have an idea of what you spend in a month, you can begin to organize your recorded expenses into a workable budget. Your budget should outline how your expenses measure up to your income—so you can plan your spending and limit overspending. In addition to your monthly expenses, be sure to factor in expenses that occur regularly but not every month, such as car maintenance.

In Kenya it’s either you save your money in a SACCO, a Bank or purchase real property with your surplus cash.

Two decades ago, there were few banks in the country, those which existed only operated from major towns only.

This led to emergency of SACCOs in small towns to cater for the services of farmers and few individuals who wanted to save their little cash.

Over time, it has become increasingly important to have both SACCOs and Banks because people never trust their neighbors with money anymore. One worrying trend emerging from the Kenyan population,

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