Credit card debt is becoming more and more prevalent, especially for those who are struggling to make ends meet. And, the more they use them, the deeper they bury themselves in debt.
Even though credit cards can be convenient to use, they must be used with care. It is all too easy to get into trouble with them. They are essential in building a good credit history, but you should be controlling your credit card use; it should not be controlling you. When you are over your head in debt, using even more credit can be the worse thing you can do. Gain control over your life by controlling your debt.
When you are trying to pay of a card, it is important to not charge anything more on it. The interest alone will make it difficult to pay off. And, never, never be late on making payments. Late payments will add another $30 to $50 fee to your owed amount. You will also have your interest rate raised if you are late with payments. Unfortunately, even just one late payment can cause a credit card company to raise its interest rate. This, in turn, makes it more difficult to pay off. Late payments will also be detrimental to your credit score.
You should have a plan for paying your bills. If you have a bill paying plan, you know exactly when each bill needs to be paid so that you are never late with a payment. Everyone needs to set up a budget; not just people who are deeply in debt. Look at your income and balance it with your expenses. First, be sure that you have enough money to make the minimum payment for each credit card. Once you have the basic payment schedule set, put aside any extra money to pay on ONE of the credit cards. When that card is paid off, take all of the money you were paying on that card and apply it to the next one.
There are software and spreadsheet computer programs that can help you decide which credit card you should pay off first. Normally, it is best to pay off the one that costs you the most money - the one with the highest interest rate. Just make sure that you are paying the minimum on all of the other debts that you owe. And, don’t forget about your day-to-day expenses like rent and food.
When you are trying to get out of debt, you will have to cut down on other expenses. Dinners at fancy restaurants and things like book club memberships will take money away from your main goal: to get out of debt. Use your common sense in deciding what is REALLY a necessity and what is not.
Pay attention to your credit card statements. The company could be charging you additional fees for owning the card (a membership fee) or for credit protection. If you are being charge these fees, cancel the card. Yes, you can cancel it even if there’s a balance owing. The company will keep the account open until it is paid off but other fees (except interest fees) will be discontinued.
Talk to your creditors and tell them if you are having trouble making payments. Ask them to lower the interest rate. They might just say “yes.” After all, they want to get paid. Not all companies will do this but you won’t know unless you ask. Remember, the lower the interest rate, the quicker the card will be paid off.
Take control of your credit card debt. You will also be taking that first step in taking control of the rest of your life.