Credit card debt
The fact that you are on this page is a positive step: you are aware that you are in debt and need to seriously do something about it. Awareness is the starting block to snag over credit card debt. When credit cards were first introduced, it was seen as a boon to avoid carrying tons of cash around and a convenient way to pay for the small items and the big stuff. Who would have thought that a little rectangular piece of plastic could cause so much grief?
How does Credit Card Debt form in the first place?
It is simple, really. Using your credit card gives you very easy access to money and you may be tempted by the ?freebies?, such as gift coupons or movie tickets, offered by the issuer for utilizing your credit card more number of times than is really necessary. Constant over-spending creates a ?snowballing effect? which escalates into a gigantic, unmanageable avalanche, as your credit payments are badly affected.
Signs of Credit Card Debt
It is vital to recognize the warning signs that you are in financial hot water before you start floundering and gasping for air. Here are some indicators that you are in credit card debt:
You start spending with your credit card beyond the limits of your earnings.
Multiple credit cards make your wallet bulky as they battle for space.
On your way to work, you buy a hamburger and coffee by using your credit card, instead of just simply purchasing such items with greenbacks.
You go to the supermarket to buy monthly provisions with your credit card. The cashier swipes your card and says the PDQ machine is not accepting your card. You hand over another care. That too is rejected; the same applies to all your cards.
Your local storeowner refuses to give you credit.
You receive a credit card bill and decide that it is not vitally important. So you avoid paying it on time or don?t bother to pay it at all.
You have reached the very nth limits of credit on your cards- all of them.
The credit card companies send their collection agents to your doorstep and are constantly jamming your phone lines with reminders to pay up.
Your feet are at the threshold of bankruptcy.
Self-Help is the Best Help
A swimming pool will have a lifeguard to save you from drowning when you venture into the deeper end, but in real life, it is YOU who needs to take the first steps. So the first thing to do is to open your eyes really wide to the fact that you are in credit card debt and recognize the signs that you have used your credit card far more than necessary. Without hesitation, you should now make a U-turn and go back to the safer end.
Here are some first aid strategies:
Do not apply for any more cards.
Do not over spend.
Do not get tempted to buy items at so-called sales.
Repeat to yourself the mantra: ?I will not overspend.?
Make a budget. Literally ink it down on paper and keep a clear track of all your expenses.
Take a firm grip on your greenbacks and put them back in your savings account.
By returning your earnings where they should be, you automatically spend less.
Think of adding some dollars, however few they may be, to your kitty by, say, taking up a part-time job in addition to your present job.
Start paying your credit card bills on time and in full.
Keep a realistic credit limit on the credit cards you have.
When you manage to pay up on a particular credit card, terminate its use. Do not get it reissued or reapply for a fresh one.
Honesty is the best policy. It is advisable that before the credit card company rushes to your threshold, let them know about the financial mess you are in. You can request them to make a reduction in your payments.
Seek professional advice on debt consolidation loans.
Further Steps to eliminate Credit Card Debt
Of course, if in the first place you control the use of your credit card, you can avoid falling into the deep end. If, however, the usage has spiraled well beyond limits, take a grip right now!
First and foremost, avoid applying for multiple credit cards. In fact, avoid applying for even one.
If you really need one, keep one- just that one.
Inform your credit card company how much limit you want placed on that card, and don?t just accept the limit that they will offer you. AND keep that limit low.
Some people wrongly assume that a high income generates a high Credit Score. Your credit score depends strictly on timely payment of your debts each and every time.
Begin at the top- look at all the bills generated by the credit card that has the highest interest rate and pay off that bill first.
You should not only pay off the dues on that card, but also add some more greenbacks to the minimum amount.
The minute you eliminate the debt on that credit card, use the saved greenbacks with which you are paying from that card for paying off dues on your next card.
Step ahead and, in a similar manner; pay off all the dues on all your cards.
The Advice of Experts
If and when you apply for a credit card in the first place, apply for one with lower interest rates. However, you should remember to have a backup strategy as and when the interest goes skywards, since a majority of credit card companies do put in a hike in their interest rates a few months later.
You have the option of approaching professional help form a credit counselor affiliated to the National Foundation for Consumer Credit (CCCS). However, be cautious! You should approach a credit-counseling agency that is reputable.
If you are facing illegal harassment from collection agents of the credit card company, get some know-how about debt collection laws from a professional in this field.
Remember: the author of this article is no expert, and the strategies suggested in this article are not necessarily the best or the only ones! The reader is advised to consult a professional for accurate and timely information about credit card debt and how to eliminate it.
Just don?t despair - as the old saying goes; where there is a will, there is a way! And once again, repeat to yourself: ?I will not overspend.?
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