Do you seem to be in a bottomless pit of credit card debt and are drowning because of all of the bills piling up? If this sounds like you, don’t give up hope, because there are ways to get out of credit card debt.
The first thing you will need to do is calculate just how much credit card debt you have. In order to attack the issue, then you first have to know exactly what you are dealing with. After you have calculated just how much credit card debt you have to figure up how much extra income you really have each month to pay toward the debt. Can you eliminate extras such as going out to eat in order to have extra funds? Next, take that extra cash flow that you find and start paying more than the minimum payment. Lastly, stop using the credit cards. There is no way that you will ever be able to get out of debt if you keep acquiring debt. Cut those cards up and call and cancel the accounts.
If you decide that you absolutely must have a credit card in your possession, then you need to check to see if you are eligible for a credit card that actually works for you by giving you money back. Such credit cards provide users with money back or rebates based on how much they are using their credit cards. While these credit cards do seem enticing, they are only best for those that will be able to pay the balance off at the end of each month. If you cannot do this, then you may end up acquiring more interest on your balance, then what you are earning back by using the card.
If you are in credit card debt, take the steps to get out and if you must be able to feel the pleasure of swiping your credit card, then make sure it is one that can actually out cash back into your pocket, explore the options that you have for the best credit cards that fit your needs.
Not really sure I’m with you 100% on all of this. 🙁
Credit card debts are tricky and dangerous. Just get in the habit of paying off your monthly balance every time. You should definitely stop buying stuff that you cannot afford.
But sometimes you will get slam with unexpected expenses you cannot control. That’s when you need to plan ahead.
Fortunately I learned the basics quiet early and never left any due on my card.
If you must use your credit card be sure to only use your cards for everyday purchases that you would normally make using cash. Put that cash to the side and do not spend it. Use it to pay the card.
Even if a credit card offers great rewards, if you are paying down debt, it is best to not use the cards. Don’t pick them up again until you are sure you can pay off the balance each month.
There are a lot of problems with credit cards which charge massive interest on money that they print (see our post if you want to know why!). They also jack up interest rates for no real reason – we got quite a lot back from MBNA aka BoA by complaining to the Financial Services Ombudsman about this (this is not a regulator).
In the UK credit card compainies now have to pay down the highest interest borrowing first, which they used not to do so people ended up in serious problems. That is a small improvement.
If you can, use your main bank to consolidate your loan at a much lower interest rate and pay that down as quickly as possible. Then don’t use the cards. Don’t use some loan consolidation company that doesn’t know you – use your main bank if at all possible.
I use my credit cards more than cash in order to monitor where my money goes. I make sure to pay off the balance everymonth.
You might not want to cancel all of your credit cards…you might need one in the event that you travel on a regular basis.
Regarding canceling credit card accounts, it’s best to pay off the balance, and keep that open line of credit because the more open credit you have available to you, the better your FICO score. This would be an exercise in willpower for some, though.