One of the worst aspects of unmanageable credit card debt is
the feeling of helplessness .It can seem as if there is no hope of ever getting
on top of things ,and that can lead to people ducking reality so hard that they
end up with their heads in the sand. The following steps will definitely help
you reduce your credit card debt.
·
Take stock of your situation. Don’t be
afraid to look your bills “in the face”
and make a list of what you actually owe by adding up balances on your credit
cards and other loans. Note the rate you are paying each card while you are at
it.
·
Listing all your essential monthly spending: rent/mortgage;
heat and power; loan payments(including minimum payments on credit cards);commuting
cost; home, car, food purchases-everything that you can’t live without.
·
Calculate the difference between your total
income and your total essential outgo .That’s your discretionary spending. If
your discretionary spending is zero or minus figure, you should find a
qualified and reputable credit counselor.
·
If you can, quit using credit cards: Instead, use
a debit card so the payment comes straight out of your bank account.
·
Freeze your debt. If you are trying to tighten
your belt, consider putting your credit cards out of service temporarily. Simply
place your card in the middle of a container full of ice cubes, putting a few
cubes on top to keep the card from floating to the surface. Fill the container
with water, and put it in the freezer. In order to use your credit card again, you’ll
have to wait for it to defrost, which will give you a ” cooling off” period to
consider your expenditures.
·
I f you must continue using your credit cards
for now, charge only what you can pay in full within 30 days when the bill
comes.
·
Minimize your spending on luxuries. Resolve not
to fritter away the discretionary spending you have on those luxuries, but
instead to devote it to pay down debt. Use a credit card calculator to explore
how long it will take you to pay down each card, and set optimistic but
achievable goals.
·
Save, don’t charge. If you want to make a large
purchase, try saving monthly for it until you can pay for it in cash. It’s much
cheaper to save for an item first than to buy it on credit. Keep your future
debt load reasonable.
Be Wise About Credit Cards
Ø Pay
attention to interest rates. Don’t throw those credit card solicitations out
without looking for cards that have a lower interest rates than your current
debt. If you have a good offer, transferring your debt can save you a bundle.
Ø Order
a copy of your credit report, and that of your spouse, and sit down together to
review them. If there are any inaccuracies, decide which of you will take steps
to correct the problems. Don’t put it off—it will only get worse.
Ø Shop
for the lowest interest rate if you expect to carry a balance from month to
month. However if you plan to keep your balance small, look for a no-annual-fee
card with the lowest interest rate you can find.
Ø Make
sure that the credit or debit card you carry has a zero liability policy.
Although payment card fraud is extremely rare, many of the card associations
enhance federal security protections with zero liability policy. The zero
liability policy provides added protection to consumers by eliminating
liabilities.
Ø Plan
ahead
Ø If
you are drowning in debt, get help! Contact the consumer credit counseling
services in your area.
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