Using the four payment rule to not carry a balance on your credit cards

As a young twenty something person I got introduced to credit cards and being naive figured that if I could afford the minimum payment on my credit cards then I could afford it. Boy was I wrong! I ended up running balances of $1000, $1,500 and $2000 on my three different credit cards. All I could afford to pay was the minimum payments of around $15 per month on each card and when the interest was added my balance would go down around $5 or so. I paid these cards for a couple of years until I finally landed a job were I made enough to make bigger payments and finally paid them off.

My point here is don't ever carry balances on your credit cards for years. I have a new method I use when I make a purchase with one of my credit cards that I call the 4 payment plan. If I can not afford to pay the purchase off in four payments then I can not afford it. If that new plasma television set I want is $2000 and I can not afford to pay $500 per month for it then I can not afford it. If I want that $500 digital camera then I must be able to afford $125 per month for it. This is my method of using credit cards and I will tell you that it has certainly worked for me and I would recommend it to anyone.