An Introduction to Credit Card Debt

Remember your first credit card? Like most Americans, you probably promised yourself, "It's just for emergencies. I'll never really use it." The truth is you probably meant it at the time. We've all heard horror stories about addicted shoppers who buy themselves into poverty with credit card debt. And we tell ourselves, "It'll never happen to me. They simply can't control themselves."

Then it happens - the first emergency. The car needs repairs, or the plumbing springs a leak, or an unexpected medical bill pops up. Your savings account is running on fumes so you have no choice but to pay the bill with a credit card. The situation certainly qualifies as an emergency, right? It's surprisingly painless to sign your name and promise yourself that you'll save every extra penny for the rest of the month and pay the bill in full to avoid interest charges.

Two weeks later, the air conditioning in your home dies. And you remember that the kids start school in a few weeks. New outfits and school supplies to buy! You realize that you won't be able to save any money this month, or next month for that matter. You resolve that in two months, when everything settles down, you'll pay half the credit card bill. Then the following month you'll pay the other half. Sigh, take a deep breath, and relax. That balance will be history in a few months.

The problem is that within those months other things will crop up which push the payoff further into the future and the balance higher until it potentially becomes out of control. You don't need to be a shopaholic to become overwhelmed by debt. Life's everyday surprises can force you into debt's vicious cycle. Of course the best plan is to never allow yourself to become dependent on credit and always keep an emergency savings account for such occasions.

For many consumers it's much too late for this alternative. Procrastination, negligence, or bad luck have created debt which can become overwhelming if ignored for too long. Realize that there is no magic word or math equation that can make consumer debt disappear overnight. No matter how uncomfortable it becomes, the debtor must dive head-first into his finances and begin a debt reduction plan. And waiting until next week, next month, or next year to start will only worsen the problem. The best time to start is now!