When credit cards put you in jeopardy
Americans are drowning in debt
Consumers have racked up more than $2.2 trillion
in purchases and cash advances on major credit cards in just the last year. And it''s become a habit for them to spend more than they have. The overall credit card debt grew by 315
percent from 1989 to 2006,
according to public policy research firm Demos. To compound the problem, fewer people are paying their credit cards bills on time. The percentage of people delinquent on their credit cards is the highest it''s been in three years, according to CardTrack.com. With banks tightening their standards and the drumbeat of recession getting louder, there''s no better time to grab control of your debt than now.
First, you have to determine if your credit card spending habits are out of control. Here are some signs: You find that you can''t make your minimum payments on your credit cards. You realize you''ve been borrowing money from family members or friends to cover your payments. You''ve gone to a lender you wouldn''t normally use -- like a payday lender that loans you money at really high rates against your next paycheck. Once you''ve made a list of your debts, it''s time to prioritize your payments. Interest rates, on average, can range from 10 to 18 percent, according to Curtis Arnold of Cardratings.com. Tackle your highest-interest credit card first. With rates averaging about 14.5 percent, you really want to knock out the high-interest debts quickly. Try shifting high-interest credit card debt onto cards that have lower interest rates.