curved lines

LSNJ LAW has just been redesigned to better answer your legal questions, help you with your legal problems, or just teach you more about the law.
Please visit our new Web site at

LSNJLAW: You and the Law in New Jersey
  Read ThisOnline IntakeGet More HelpAbout LSNJEspanolSite Map

Debt and Purchases

Home Help      
Home Page > Debt and Purchases > Credit

Avoiding Credit Card Problems


Credit card debts can spiral out of control. Here are some ways to protect yourself from getting in over your head.

  • Do not use credit cards to finance an unaffordable lifestyle. If you are constantly using your card without the ability to pay the resulting bill in full each month, consider whether you are using your cards to make an unreasonable budget plan work. No one can survive for long by borrowing without a plan to pay off the resulting debts.

  • If you get into financial trouble, do not make it worse by using credit cards to make ends meet. If you find that you are using credit cards to get through a period of financial difficulty, consider the likelihood that additional credit will only make things worse. For example, if you use cash advances on your credit card to pay bills, the interest due will only add to your debt burden sooner rather than later.

    Making the minimum allowable payments on your credit cards will barely pay down the balance even if you make no new purchases. If you get in over your head, the credit card lender may increase the minimum payment and create a spiral of financial problems.

  • Don’t get hooked on minimum payments. In most cases, the credit card lender will offer an optional “minimum payment” in their monthly billing, which means that you will not be paying down your debt, or that you will be paying it down very slowly. If you are also making new purchases every month, making only minimum monthly payments will cause your debt to grow. This will increase your monthly interest obligations and lower the amount of money in your monthly budget for necessities.

  • Don’t run up the balance in reliance on a temporary “teaser” interest rate. Money borrowed during a temporary rate period of 6% is likely to be paid back at a much higher permanent rate of 15% or more.

  • If you can afford to do so consistently with your budget plan, make your credit card payments on time. Avoid late payment charges and penalty rates if you can do so without endangering your ability to keep up with higher priority debts. Bad problems get worse fast when you have a new higher interest rate and late charge to pay during a time of financial difficulty.

  • Avoid the special services, programs, and goods that credit card lenders offer to bill to their cards. You are likely to receive numerous advertisements from credit card lenders. Most of these special services—credit card protection plans, credit record protection, travel clubs, life insurance, and other similar offers—are bad deals. It is best to throw out advertisements or, at a minimum, read them with a high degree of caution.

  • Beware of unsolicited increases by a credit card lender to your credit card limit. Some lenders increase your credit limit even when you have not asked for more credit. Do not assume that this means that the lender thinks you can afford more credit. The opposite may be true. Lenders generally increase the limit for consumers who they think will carry a bigger balance and pay more interest. You need to evaluate whether you can afford more credit based on your individual circumstances.

Reprinted by permission from The NCLC “Guide to Surviving Debt (2002 Edition),” which may be purchased from the National Consumer Law Center, 77 Summer Street, 10th Floor, Boston, MA 02110-1006, or online (see link below).


This article appeared in the November 2003 edition of Looking Out for Your Legal Rights®.


  • National Consumer Law Center - The National Consumer Law Center (NCLC) helps consumers, their advocates, and public policy makers use consumer laws on behalf of low-income and elderly Americans seeking economic justice. NCLC addresses the financial and legal problems faced daily by low-income families, including repossessions, debt collection abuses, electronic benefits transfers, home improvement frauds, usury, bankruptcy, utility terminations, school loans, payday loans, sustainable home ownership, and fuel assistance benefits.

This information last reviewed 10/25/11.


Top of page Terms of Use | Privacy Policy | Glossary

Low-income New Jerseyans can get free legal help by phone: call our toll-free hotline at 1-888-LSNJ-LAW (1-888-576-5529), Monday through Friday, 8:00 a.m. to 5:30 p.m. Outside of New Jersey, please call 732-572-9100 and ask to be transferred to the hotline.