Credit Card Debt? 5 Tips for Escaping Debt Consolidation

Credit Card Debt? 5 Tips for Escaping

January 17th, 2010 Admin Leave a comment Go to comments

Your debts are piling up, and you’re having problems making minimum payments on time. Those banks, those credit card companies…if only they hadn’t raised your rates. If only they hadn’t added a late charge to your balance. If only…

Moneywatch blogger Ray Martin points out that some consumers fail to assume responsibility for overspending on credit cards. Carrying revolving balances incurs interest charges, and once you approach your credit limits, credit card debt can lead to additional fees and/or increases in your interest rates. Although an estimated 60% of personal bankruptcies are allegedly caused by health care expenses, that leaves 40% that may result from overspending. Here are some steps for gaining control of your spending and getting help needed for returning to financial sanity.

Accept responsibility for your debt and spending: Taking ownership of your debt and resulting problems puts you in the driver’s seat. Set goals for becoming debt free, and make a plan. Tracking progress is a great incentive for sticking with your plan. Stop using credit cards: If you’re carrying balances on your credit cards, it’s costing money. In the current economic climate, credit card companies are less willing to accept exposure to risk. Customers who carry high balances or make late payments may find their interest rates climbing. High interest rates and fees increase your debt and make it difficult to reduce your balances. Put your cards away: Don’t carry credit cards and keep them away from your computer. Shopping online can be fun, but it can also lead to the same problems as making a date with your friends at the shopping mall. Get a debit card displaying a major credit card logo. These cards are accepted the same way as credit cards, but the funds come out of your bank account. This is typically enough to curtail most if not all impulsive purchases. Establish and keep a cash based budget: Whipping out credit cards for weekend pizza, car repairs, and a trip to the veterinarian is OK if you’re paying off your credit card balances in full each month, but most of us don’t do that. Work out a cash based budget, and pay cash or use your debit card; you don’t want to slow down paying off your credit card debt by adding more. In too deep? Get help: If you can make it through the month without relying on credit cards for essential expenses, or if you’re skipping one payment to make another, it’s time to get debt help. Debt consolidation and credit counseling agencies offer affordable solutions for getting out of debt. If you owe several months’ payments, debt settlement may provide an alternative to filing bankruptcy.

Get started toward debt freedom today. Credit counselors can help evaluate your circumstances and recommend appropriate solutions fitting your situation.

Relief Debt Systems