Get Control Of Your Debt
There's no doubt that mounting credit card debt is becoming a problem for the average American family. It's not uncommon for families to be in debt more than $10,000 on their credit cards. It doesn't happen over night. The balances creep up just a little at time. A quick stop at the gas station on the way to work; a pizza with friends on the weekend; a new blouse for an upcoming wedding.
No one means for credit card debt to spiral out of control, but sometimes it does, leaving a huge dent in your financial picture.
With a little hard work, you can take control and eliminate your credit card debt.
1. First, stop spending. This is by far the most important step to credit card debt management. Cut up the credit cards. Give them to a friend or family member. Put them in a plastic bag, place them in water, and store them in the freezer. Do whatever you need to do to make sure that you do not have instant access to your credit cards. It will not be easy, especially the first month. Inevitably, the boots you've been eyeing will go on special, your children will need an extra gift for a birthday party, or you find you need more gas in the car. Get creative. Find ways to get through the first few weeks without a credit card. If you can make it through the first month without using a credit card, you're well on your way.
2. Take a good hard look at your balances. Make a list of each credit card balance that you owe and the interest rate.
3. Next, call your credit card companies and see if they will reduce your interest rates. If you've recently received an advertisement in the mail for a different card, see if they'll match it. If you've always made your payments on time and are current on your bill, most companies will reduce your interest rate to keep you as a customer. It's as simple as a phone call.
4. Consolidate your credit card debt onto the cards with the lowest interest rates. Some cards are now offering 0% interest for a certain amount of time and even smaller fixed rates (like 4.9% and 5.9%) until the balance is paid in full. Take advantage of these offers and reduce your overall interest rate. The more you pay toward the principal of your balances, the sooner you'll have the credit cards paid off.
5. Develop a plan for paying off your balances. Start with the lowest balance first. Use every single cent you can find to pay above the minimum payment that first month. Each month, pay as much as you can. Increase your income. Work a second job for awhile, if needed. When your first card is paid off, take your minimum payment from the first card and pay it (in addition to the regular payment) to your second card. By the time you've paid off two or three cards, you should have a sizable amount of money to throw at your credit card balances.
6. Set a goal and write it down. Do you think you can pay off your credit cards in six months? 12 months? 18 months? Put it in writing and post it prominently, so you're reminded daily of what it is you would like to accomplish.
