Getting Out and Staying Out Of Credit Card Debt
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One of the major mistakes that credit card holders make is spending more than they would be able to pay for. From being a great financial instrument, the seemingly innocent credit card becomes a financial burden. It is not bad per se. It is the unwise use of the card holder that makes it a not so good idea.
Impulse buying is a water-loo that credit card holders need to avoid. Often, these impulse shoppers end up with things they do not really need. These things would just end up rotting in the closet or down in the basement along with other purchases.
The convenience and the illusion of not having to take out cash when shopping has somehow given the wrong idea to our “cashless” society that there are no dents on the budget when you use a card. A blinding illusion that hits you right in the face once the bills start coming in. It is easy to max out credit card limits but very difficult to get out of the debt. In the long run, the person gets in deep debt and earns a failing credit score. Credit ratings are in fact important in other, more important financial transactions and yes, even in being granted new and higher credit limits or another line of credit.
Zeroing out credit card debt is challenging but not impossible. But it would take discipline, patience and planning. First, it has to be a conscious decision to want to get rid of the debt. This would mean serious cutting down in expenses and living within means. Second is to get out of the habit of paying only the minimum required monthly payments. Increase the monthly payments so as to hasten the decrease in payables. This would also reduce the interest that is charged against the principal amount owed. Try checking with your credit card provider for any accommodations that can be given should you decide or be able to pay debts sooner than expected. In most cases, credit card providers are amenable to adjusted payment schemes that would turn you into a paying cardholder instead of a delinquent one.
When you receive any additional income from whatever source, like overtime pays, bonuses or commissions do not spend them. Allot them for debt payment. If you have more than one credit card, try to do a balance transfer. This means clearing out balances in one card by transferring all that is owed to the other one, At this point, you will only have to worry about one credit card, with one credit and payment scheme. Once you have cleared one card from debt, have it cancelled so as not to get yourself tempted into charging again.
After you have devised all that you need to do from wiping out your debt, stop fretting. You have a plan and you are going to see it through to its completion. Have faith in what you can do. Life does not end when you cut down on the non-essentials. In fact, you might even find more meaning and fulfillment in the non-tangibles that you might have overlooked before. While this all seems dramatic and intense, realizing what really matters in life can actually be the way for you to get your act straight, learn about priorities and start saving money. Life is to be enjoyed. No one deserves to be burdened by debt.
Author Bio: Francisco Arbes aim to help individuals in making wise decisions about money saving, practical spending, insurance, credit and debt, investing, and more through his blog; Money and Finance Journal.
Images courtesy of luigi diamanti and Sura Nualpradid / FreeDigitalPhotos.net