Credit Card Debt

Out Of Control Credit Card Debt – How To Manage It

Credit cards are good! Using a credit card is an excellent way to build up credit, have funds during an emergency or take advantage of shopping online. However, as most Americans know, credit card debt can really destroy your personal finances. The best cure is prevention, so if you’re going to use credit cards, learn to use them responsibly.

Pay More And Save In The Long Run

First of all, each month make more than your minimum monthly payment. They charge lots of interest and this is how they make their money. For you, it’s the same thing as throwing the money down the toilet. Pay extra, and you’ll save money in the long run.

Read The Fine Print

When applying for credit cards, always read every bit of fine print. Most contracts contain hidden fees. When you get smacked with these fees in the future, you’ll call them and they’ll tell you, “It was in the contract.” Go over that fine print so that there won’t be any surprises.

Learn To Negotiate

You can also always use your leverage as a customer. Remember that old saying, “The customer is always right?” They’d rather keep your business than lose you to another company. Threaten to cancel your cards or change companies, and you can negotiate your payments.

Cut The Cards

Finally, stop charging. This is the ultimate way to get control. Cut up your cards and cancel your service. When things get out of hand, the situation demands strong measures!

A Strategy For Dealing With Insane Credit Card Debt

What if you’re already in over your head? First, make a huge list of everything you owe, and include in the numbers all the future interest you’ll end up paying. Prioritize your debts from smallest to largest. In other words, you’re going to pay off those smaller ones first. Once a smaller debt is paid off, call immediately and cancel it. Don’t even give yourself a second to think about NOT canceling it! It’s much easier to pay off small ones than to roll them over into big ones.

After Paying It Back, How To Stay In Control

Once your credit card debts are paid, there’s still the danger of slipping back into unmanageable debt. Staying out of trouble can be just as hard as paying it all back. Here is a list of things you can do to stay credit card debt-free.

  • First, make a “plan of action” and write it down. Writing down your goals makes them more real to you.
  • Budget. Make a list of monthly income and expenses and stick to it. Make sure it’s realistic.
  • Pick some times and occasions where you can splurge out of your budget, but do it with cash.
  • Make it a habit to pay by cash or check, and save cards for emergencies, vacations or online purchasing.
  • If you decide to use credit cards, overpay until they’re paid off as soon as possible.
  • Carry just what you can spend.
  • Become a bargain hunter.

Let’s face it – we live in an out-of-control consumer society. Credit card debt has become a fact of life. However, it doesn’t have to be a WAY of life. Keep your credit card debt under control and you’ll have a much easier time keeping your finances in order.

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