Managing Credit Card Debt

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Managing Credit Card Debt

Sunday, November 30th, 2008    Subscribe To Our Feed

Personally, I consider credit cards one of the curses for living in the modern world. There are times we need a credit card for flexibility, e.g. those purchases which we just have to have?

You’d have a hard time making a purchase online without one of that piece of plastic. Credit cards make life easier - maybe too easy. Paying with a credit card is too easy.

If it is not monitored carefully, it is very, very easy for credit card debt to get out of hand. You can easily go into debt way over your head by simply using credit cards in an indisciplined way on everyday living expenses. The first step in effectively managing credit card debt is to recognise and accept the fact that it is a DEBT [notice the capital letters], and you do owe the money. If you don’t want to pay interest, fees, and penalties, either don’t use the card or pay the balance at the end of every month. You then become a customer the credit card companies do not like – the one who cannot be made to pay them money.

Let’s be fair, credit cards, when and if they are used responsibly, can be good things and deserve to be an option. They can even save you money if you used with discipline. They could even reward you!  The card that rewards you for using it and if you are sensible about it the credit card company could never make money out of your in interest, fees, or penalties – what’s the secret – well actually there is not one! I don’t have one. Simply repay the card debt in full BEFORE the due date and accept the reward that they give you for using the card for your convenience. It’s a terrific arrangement.

To get into that position though, it takes some serious self-discipline. You have to learn to pay for everyday expenses with cash or personal checks and not with credit cards. Remember, in order to reduce credit card debt, you need to pay MORE than the minimum payment. One approach is to choose one card (the one with the highest interest rate) and concentrate on paying that card off while making minimum payments on other cards. You can get out from under card debt. Go for it!

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