Do You Have Too Many Debts?

Debt from undisciplined and irresponsible credit card use is a big problem across the world as the economic climate makes consumer come face-to-face with their debt. For some their debt is not from frivolous spending but a medical emergency or some unforeseen event, but most people with credit card debt find themselves dealing with the stress and burden of debt because of unwise spending or use of their credit cards.

There are many ways to take on the task of paying of credit card balances. For example, paying highest interest first or paying the lowest balance owed regardless of the interest rate. Whatever method used it takes extreme focus, dedication, restraint and discipline to pay it off and pass up the check out counter.

Paying off debt of any kind is one step in the process, but what happens once all your debts are marked paid-in-full! Does your spending life change?

Life After Debt

The road into debt is usually littered with a variety of purchases that ever so slowly begin to multiply and poison a consumer’s life. These consumers are confused. They confuse fun and pleasure thinking it will make them happy.

No everyone who starts the journey to bury their debt wins and is successful. The path to debt was slow and so will the journey out of the grip of debt. Some make it and celebrate with a buying spree instead of learning debt lifestyle lessons.

The goal of paying off debt should be one step but the next should be of greater or equal importance, which is to remain debt-free. The payoff is a less-stress life. You’ll gain a new perspective on buying needs and not financing wants.

The “rules” you need to follow are so basic but it is simple rules far too many consumers ignore and bury their head in the sand. Here’s a quick run down to get those credit cards paid down and off.

Consolidate

Take all those multiple cards and consolidate them into a balance transfer creditcard if you are facing high balances and the process will take some time. Move the open credit card balances over to a new low interest balance credit card to consolidate the debt and give yourself one focused bill.

Do Not Overspend

A sale on something you cannot afford is no deal. Stay out of the stores if the temptation is too great.

Stay well below your credit limit. The target is 50%. Whatever your credit limit try to get below 50% of that total.

Pay bills on time and pay extra. It is best to stop charging all together but if you must charge pay off all charges made during the month and then pay the minimum plus more. Remember this takes focus.

No more than 2 cards. That means only 2 accounts. Close all the other accounts.

Start tracking your spending. Write down each expenditure to see where you are spending extra money - everyone does. Stop the extra spending and apply the extra money to the credit card balance. This is above the minimum.

Those are just some very basic items to get started. Look at creating a spending plan as you start seeing where your money is being spent. Attack the debt on those credit cards.

Each year in the US the debt on credit cards continues to grow. It is the kind of growth which is creating tremendous problems as individuals and families face widening financial issues reaching beyond the credit card market alone. As consumers face growing credit card debt other markets like mortgages, cars, housing, higher education and other industries feel the effects of the debt.

As this debt grows more individuals are seeking the services of debt consolidation companies or taking other more drastic measure like foreclosures or bankruptcy in an attempt to fix or gain some control of their finances and get back on stable financial footing again.

A Few Facts on Debt with Credit Cards

When dealing with money it is important to get a complete picture and know the numbers. The average credit card not the individual but the card currently carries a balance around $1000. If you took this $1000 balance and only paid the minimum 2% payments each month it would take about 22 years along with an additional $2300 to pay off the debt.

On the national average the American household is starring at almost $8500 in debt each month on their credit cards. The average debt on credit cards has tripled since 1990.

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It is sad that many consumer have no idea how much interest they are spending each year, among the unknowns are those how do not have a worry about how much they spend on interest until they must face it down. The average American is paying out from their sweat and hard work more than $1200 per year in interest. That figure is enough to cover one mortgage payment and then some.

For those struggling to make the mortgage payment each month, start looking at your spending on the credit cards.

Interest rates are also rising with the average rate hovering around almost 19% and inching higher. Some credit cards start with a rate of 23% APR and near the 30% mark for those with damaged or bad credit. If you surveyed the American credit card holder 50% would never share what they owe in debt, 23% carry cards which are maxed out, 13% can claim to be late at lest 30 days on a payment sometime in the past 12 months and 11% can boost that their card debt is in collections. Too many individuals have a debt to credit ratiowhich is out of balance.

Poor credit and financial management on a personal level is a growing economic problem. A problem that is slowly taking its toll in a variety of ways in many different industries and ripping apart American families. It is a problem that individuals must begin to address for their own well being both now and in the future.

Does this sound familiar - something unexpected pops up and you have to charge it on your credit card because you just don’t have the cash on hand? Or what about charging the latest toy or gadget because you absolutely have to have it now? These are common reasons for using a credit card, but unfortunately in the end the bill always has to be repaid.

If we let things get too far out of hand, the result can be a large amount of credit card debt and no means to pay it off. It ends up costing a ton of interest, in some cases for years after the purchase was actually made. If this is a problem for you, there are places you can turn.

The first step to take is to try and get a lower interest rate on your card. This can be done in either of two ways. The first - and probably simplest - way is to call your credit card provider’s customer service number and ask for a lower rate.

They’ll usually be able to tell you within a minute or two whether you qualify for a better rate, and you’d be surprised how often you’ll get it just by asking.

The second way is to apply for a second credit card with a lower interest rate. Once you have this card, transfer the outstanding balance from the higher rate card to the lower one. Incidentally, if you find a better rate on another card, that can be a leverage point when you ask your credit card company for a lower rate.

Credit Counseling is another option for managing your credit card debt. There are many credit counseling services that can help you work with your current creditors to get a better rate and more reasonable repayment schedule. These services deal with the credit card companies on a regular basis, so they can often succeed where you might not if you call them yourself.

The cost of these services varies. In some cases, you’ll be able to find free services that will work with you. You provide them with all your credit card information as well as other debts you might owe.

They’ll consolidate all that information and work out the best repayment schedule to suit your needs. If you’re feeling like your credit card debt is a huge weight on your shoulders, don’t keep struggling to carry it alone. A credit counseling service may be able to ease that burden for you.