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While credit cards can be useful, they can also lead to a long-term cycle of debt.
GOBankingRates spoke with Jason B.
Also see the five myths about debt that nobody should believe in 2024.
As a CFP, Ive seen too many retirees overwhelmed by debt from essential health services.
Medical expenses are hard to avoid.
But there are better ways to pay than using a credit card.
This strategy avoids those crippling interest charges and keeps your finances healthier.
HSAs are primarily designed for medical expenses.
With one, you might withdraw money to cover qualified medical expenses tax-free.
Not only can renovations cost more than you expected, but interest charges can really rack up.
Ive encountered situations where home renovations resulted infar more debtthat was initially planned.
Its far better to save up or seek low-interest home equity loans or lines of credit, Ball said.
This approach ensures your home improvements dont compromise your financial stability.
you might also start small so as to avoid spendingtoo much money.
Its much easier to spend more later than it is to pay off high-interest debts because you went overboard.
Cars
Financing a new car with a credit card?
According toKelley Blue Book, earlier this year, an average new car cost over $47,000.
The average interest rate on a new car is 6.73%, perCNN.
As for used vehicles, the average interest rate is 11.91%.
On average, credit cards have much higher interest rates than auto loans.
But even auto loans can lead to financial strain.
This way, you avoid the long-term financial strain and keep your budget intact.
Even those who end up spending much less should stillavoid using credit cardsto fund their trip.
I always recommend saving up for travel expenses, Ball said.
Enjoy your adventures debt-free and keep those memories sweet.
Groceries
Ball also suggested that retirees avoid using credit to pay for everyday groceries.
Stick to your regular income or savings for these purchases, he said.
Just confirm youre benefiting from doing so such as through miles or other rewards.
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