This Essential Mark Cuban Rule Could Save You Thousands

It's an important one to follow.

Mark Cuban is known not just as a very rich man, but also, a shrewd investor. But the Shark Tank billionaire didn't start out wealthy. In fact, Cuban spent much of his 20s struggling to keep up with his bills. At one point, in fact, he had to resort to working odd jobs to make ends meet.

But through his struggles, Cuban learned a thing or two about growing wealth and attaining financial security. And if you want to follow in his footsteps, there's one rule worth following.

Avoid credit card debt like the plague

Mark Cuban insists that racking up credit card debt is bad news. And he's absolutely right for one key reason -- the money you spend on interest is money you won't have available to invest with, pay bills with, or use to better your financial picture.

Cuban himself is no stranger to credit card debt. In his 20s, he racked up his fair share of it. But he's since learned his lesson. And now, he wants to help consumers avoid falling into a similar trap.

To be clear, Cuban doesn't think all debt is bad. Taking out a mortgage to buy a home, for example, is a smart financial move.

But mortgage rates tend to be much lower than credit card interest rates. Also a mortgage helps you own a home, an asset that can gain value over time. You can then sell that asset at a profit. The things you buy on credit cards probably don't fall into the same category.

Should you ditch your credit cards?

Cuban doesn't think you need to throw your credit cards away. Rather, you should simply do your best to pay off your balances every month and not carry them forward. Doing so could actually help you build credit, and just as importantly, avoid wasting money on interest.

That said, there are a few steps you can take to avoid racking up too high a credit card balance. For one thing, follow a budget. You can use a spreadsheet or budgeting apps to put one together, but the key is to know what you can afford to spend across different expense categories.

Next, don't just let charges accumulate on your credit cards. Rather, check your balances regularly during the month. If you see that you're racking up a lot of charges, you can cut back on spending until your next billing cycle.

Avoid a dangerous trap

Once you land in credit card debt, it can be difficult to bust out of it. And so you're better off avoiding it in the first place.

Now rest assured that if you already owe money on your credit cards, you're in good company. After all, Cuban himself has been there. But if that's the case, do your best to reduce your spending or boost your income with a second job so you can eliminate that debt as quickly as possible. Doing so could save you a lot of money by not having to pay as much interest to the credit card companies.