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Finance: Save Yourself From Credit Card Shock"

By Mariana Boskovic

(NC)-Follow these five simple rules to avoid going into a debt spiral:

1. Plan ahead.
   "Start with an overall budget plan and stick to it," said Liz Lunney, senior vice president of Fiduciary Trust Company of Canada. "This will ensure realistic purchases and help prevent frivolous shopping."
2. Use cash to help keep spending in check.
   Remember, cash is king when it comes to staying out of debt. Don't forget - your bank card is the next best thing to ensure you are only purchasing what you can afford.
3. Get to know your credit card.
   "Learn the details of your credit terms such as the interest rate, payment date and late payment penalties," said Ms. Lunney. "Interest rates on some credit cards are astronomical and can cause debt to escalate quickly."
4. Pay the maximum amount on your credit card on time.
   Penalty fees for late payment can be high. Paying the minimum balance due may result in more financial flexibility in the short-term but interest grows on the principal debt, increasing the overall amount you owe.

Save for a rainy day.
Once you get your credit card debt paid off, it is important to save a little extra in case unexpected expenses or an emergency come up. This will help ensure that you avoid getting into credit card debt in the future. More information on saving and financial planning is available at www.fiduciarytrust.ca.

- News Canada