Formulate a Financial Plan

Know Your Net Worth

Manage & Minimize Debt

Accumulate Assets

Budget to Live Within Your Means

Understand Investing Basics

Plan for Retirement

Insure People & Property

Deal with Financial Advisors

Review Your Employment Contract

Make Plans for Your Estate

Make Good Decisions


Credit cards are a silent menace. It’s extremely tempting to make purchases using a plastic card: It doesn’t seem like real money, and you can have anything you want ... until the bills begin to roll in.

Credit card companies allow you to make small minimum monthly payments to support a large balance. That may seem convenient initially, but the interest rates on ongoing balances can be in excess of 20% annually! This is a deadly rate. Generally, you’re far better off seeking a loan from a bank rather than borrowing using a credit card.

The safest solution is not to rely on a credit card as a borrowing source. Instead view it as a convenience—avoiding the need to carry cash—and pay off all monthly balances in full. Don’t use credit cards to pay for anything that will require an ongoing monthly balance. Zero-interest financing may be an exception—as long as you don’t miss any payments that trigger high interest rates.

If you know a purchase will force you to maintain a long-term credit card balance at a high interest rate, moving forward with the purchase is likely to be an example of living beyond your means.

Another alternative is to view credit cards as a way to accrue frequent flyer miles or money back credits. But that’s it! Always pay off your monthly credit card balance in full.

Of course, the most dependable way to avoid credit card debt is very simple—don’t carry credit cards with you. Keep yourself on a strict cash diet. That may seem over the top in a modern economy where everything works on magnetized plastic cards. And who has time to go to the bank to withdraw cash? But if you don’t have a credit card, you can’t have credit card debt. If you know you have a predilection for abusing the privilege of owning a card—cut it up! And if you must participate in the modern electronic economy, get a debit card. Debit cards don’t extend you a loan; they simply tap into your existing bank balance.

If you really can’t make ends meet, you’re back to seeking a loan from the government or a private lender; one that will be manageable. In stating this, I’m assuming you’re a student who must resort to borrowing due to high education-related costs. If you’ve completed your medical education and you are gainfully employed, it’s difficult to accept the necessity for more loans. More likely, you must take an honest look at your budget and cut unnecessary expenses. If your income isn’t going up, your expenditures must come down. The math is simple.