Achieving Victory Over Burdensome Credit Card Debt

Credit cards seem quite the convenience when you first get them. You don't have to carry large sums of money around, they are helpful in emergencies, and you can purchase items online. But for too many consumers, before long credit card usage can lead to a burdensome level of credit card debt. Due to the very high rate of interest credit cards charge, this is a problem that needs to be dealt with as soon as possible.

The first step to recovery is to admit you have a problem. If you have a credit card debt problem, it's time to face up to it so that you can deal with it. Step one is to get out all your credit card bills and make a list of the following information: total amount owed on each card, percentage of interest charged by each card, and your most recent monthly finance charges, minimum payment, and actual payment made. Frightening, isn't it? But now that you've faced up to the grim truth, you can start to solve the problem.

If you haven't already done so, quit using your credit cards. Pay cash for everything you can, even things like gasoline that you may have always charged to your card. The first month that you do this will be hard. Stick it out.

If your checking account does not pay you interest and provide you with a debit card to access your funds, find one that does. Also sign up for internet access to your bank account. Make sure you also have a savings account at the same bank. When you receive your paycheck, deposit the amount you will use for living expenses such as groceries and gasoline into the savings account, and the money you use to pay your bills into the checking account. This will help keep you from spending your bill-paying money on groceries.

When you are trying to overcome your debt, you must learn to live on less. Write down what you spend your money on so that you see how you can save. Some advisors will tell you to buy a store brand of soda instead of the brand name. Drink water instead. Some will tell you to shop for clothing on sale, or buy it at a thrift shop. Don't buy clothes at all, unless an old garment needs to be replaced. Get rid of the habit of shopping for pleasure, or of hanging out at the mall. Don't eat out. Cook your own food at home, and be sure and avoid expensive foods. Now is also a good time to go on a diet and eliminate chips and other snacks from your diet and from your shopping cart.

If you have several credit cards to pay off, and not much money with which to do it, concentrate on the one with the smallest balance while paying a little over the minimum on the others. It will encourage you to see as that balance goes down to zero. Then start on the next-smallest balance.

It may seem a bitter lesson, but the things you will learn while getting out from under your credit card debt burden will help you manage your money more wisely for the rest of your life. And there is a certain joy you will feel each time you pay your bills when you have a plan for eliminating your debts.

References:

Credit card debt - Wikipedia http://en.wikipedia.org/wiki/Credit_card_debt

How to dig yourself out of credit card debt: Denver Business Journal http://www.bizjournals.com/denver/stories/1997/07/07/smallb4.html

Credit cards: Which debt to pay off first http://www.bankrate.com/brm/news/cc/19980713.asp