10 Tips to Handling Credit Card Debt

It’s almost impossible to not have a credit card today. If you want to make online purchases, book a hotel room, or a vacation you really need to have a credit card. Credit card debt can soon become a real problem and end up controlling your life. It’s easy to get into the debt but often seems impossible to get out of it.
The real problem begins when you start to use your credit cards for everyday living expenses, or get carried away with shopping sprees and don’t pay off the balance within the month, so you start getting hit with high interest rates. These interest rates can be astronomical and before you know it debt gets out of control.
One credit card maxed out often leads to getting another card and then another, and before you know where you are things have totally spiraled out of control and your drowning in debt. It is not uncommonfor many Americans to have as many as 9 credit cards.

Credit Card Debt

So what can you do to help your situation if this happens to you? Well first of all you have to acknowledge that this is a problem that needs a solution that you will take action on. Here are some of the most important things that you have to do in order to get your finances under control.

1. Cut up all your credit cards bar one. As already mentioned you do need a credit card for certain things but you must put this one credit card away and use for emergencies only.
2. Add up the total of all of your debts – you need to know what you are working with. Knowing things have got out of control and feeling doomed a lot of people don’t even open their bills because they know they can’t do anything about it. You have to know what you owe.
3. If you have more than one credit card list them all and how much you owe on each one and what the interest rate is charged on each card. Once you have done that you are going to contact the credit card companies and request a lower interest rate. If you find one with the lowest rate see about transferring the total amount to this one credit card company. Don’t be afraid to ask as all these credit card companies are in competition with each other for your business and are used to offering incentives to get business.
4. What you are trying to do here is to consolidate your debt so that you have the lowest interest rate you can get and have only one payment rather than multiple payments. When you are paying the very minimal amounts on your credit cards you will take forever to pay off the debt. If you don’t get satisfaction with the credit card companies or this method doesn’t really help your situation make an appointment to speak with someone at your bank about debt consolidation. In the long run having one payment will end up costing less than multiple payments.
5. If you are a home owner and have a lot of other debt too you may want to consolidate your debts with your mortgage, this will usually reduce the monthly payment plus you get the benefits of tax relief at least if you are in the US.
6. You still need to do something more to reduce the debt so your next step- Add up all of your assets this means your savings, assets, retirement savings, investments anything you have. The fact that you get such little interest on your own money these days it is better to dig into your savings to reduce your debt.
7. Make a list of all of your monthly expenses and see where you can save money. Are you too frivolous with your utilities? Can you get a better price package on your cable, internet and phone bill, what about your vehicle costs and fuel, can you cut back here? If we really try most of us could find ways to cut back a bit on monthly bills.
8. Keep a track on every penny you spend for a month and that is everything from a newspaper, magazine, to every latte or other special coffee, muffin and anything else. These little luxury items add up over the month, you won’t have even realize how much you spend on them.
9. Consider ways to make some extra cash for a while and every penny you make pay it off your debt. Be a bit creative and remember that it doesn’t have to be forever but it will help relieve a lot of stress and put you on the right path to being unburdened.
10. Try using cash – I know that we are be discouraged to use cash but it’s the best way to manage your money. Take a certain amount of cash out of the bank from your income and allow yourself so much a day keep it a minimal amount and when it’s gone it’s gone. You can’t go get more until the next day’s allowance. You will soon learn to manage your money better. That’s how people used to live and they managed way better than people today.
If you have kids around get them on the right track now don’t set them up for failure and a life of debt by relying on credit cards. Most young kids think the money you get out of a bank machine is for free and that credit cards are great they have no idea what it takes to pay off the debt.
Things may seem hopeless and it’s easy to believe that you are doomed but it’s time to face the music and do what needs to be done. There’s a saying spend no more than 20% of your time on the problem and spend 80% of your time on the solution and it holds true!

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