Manage Credit Card Debt In 5 Simple Steps
Source: Open Talk Magazine 16/02/2011 19:02:00
Credit card debt has increasingly become the primary reason for people’s high debt to income ratio in today’s society. We have started using credit cards to purchase everything ranging from refrigerators to microwave ovens to lipstick.
The strong desire to purchase high ticketed items with large credit limits and small savings accounts makes it attractive to use the credit card over withdrawing cash from the savings account. In return, high interest rates and the inability to payoff the final credit card balance after the large purchases are pushing the average person and family into deep financial debt.
Proper handling of credit card debt may seem impractical to do if you’re going through difficulties in your finances. But never feel over anxious as there will always be ways to get out of your bad financial situation. Scrutinize any financial debt alternative that will help you put your finances back on the right track. Your debt is still controllable. It may not be that trouble-free, but in the long run, it’ll be worth the effort.
Gaining control of your financial debt may seem impossible at the moment, but here you will find five simple steps that will help you do just that. Simply follow these step-by-step guidelines and you will finally gain control with ease:
- You must not carry any balance on your credit card from month to month. If you are only making the minimum required payment, you are slowly killing yourself. This will stretch your payments out for decades. You need to start putting extra money to each credit card payment. If you have more than one credit card, first focus on the credit card with the lowest balance. This will not only speed up the process, but will give you a quicker sense of accomplishment. Once one credit card is paid off, triple-up on the payments being made towards the credit card with the larger balance. In no time, you will see your credit card debt wiped clean.
Do A Phone Request
- First shop around and see if you can locate other companies that are offering special low-interest or interest-free introductory credit cards for a set time frame. Then call your credit card companies and request a lower or better interest rate. If you are a good buyer who makes payments on time, you will un-doubtfully succeed. Tell them you want the lowest possible rate and maybe even inform them you’ve received an offer to transfer your balance to another card at a better interest rate. If they won't lessen your rate, consider transferring your balance to the low-interest or interest-free card.
- Send your cards on a slight vacation. If you got debt and you can't pay it completely, you must stop using your credit cards now. Keep them locked away somewhere and if you have too many cards with heavy debt load, considered cutting up one or two.
Look For Money
- In order to aggressively push that credit card balance downward, you will need extra money. Most of the time we have extra money, but don’t necessarily realize it! Simply putting another $50 towards your debt can have a dramatic affect. Look at all the activities and extra spending you do on a monthly basis. Do you go out to dinner once or twice a week? Do you go out to lunch everyday? Do you go to the movies every weekend? Do you stop by the coffee shop every morning? If so, do you order plain coffee or the expensive ‘Super Espresso’? Do you indulge in ‘Happy Hour’ with your friends after work? Somewhere lurking is another $50 dollars that you can place towards your credit card bill, but in order to find it; you must first look for it!
Vow To Change
- The final and most important is to come to terms with the fact that you are in your current financial situation because of your poor spending habits. You must realize that you cannot continue to frivolously shop and spend without destroying your financial future. This will be the most difficult of all five steps, but also will have the greatest impact. The key is to take a ‘vow to change’ and respect that vow like you would respect your vows in marriage.
- Your financial future is not only important to how you live, but also important to your health and well being; as well as your family’s health and well being. Studies show that most families fall apart due to financial stress and finances is the number one subject of arguments between couples. So if you think over-spending is not a big deal, think again!
Now you know how to gain control over your credit card debt. Becoming a master at handling credit card debt will change your life for the better. Not only will you have a larger savings account; you will find yourself feeling more relaxed and free. Besides that, you will stop wondering if it’s a debt collector calling you every time the telephone rings. Having one or two credit cards is not a bad thing as long as they are used wisely with discipline and only when you truly need them!