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People who do not keep track of their credit card spending almost always find themselves in deep trouble. The best advice
or recourse available usually turn out to be the simplest ones. Whatever course you choose to take, two things are constant: Do it now and stick to your plan. Don't let up until your balance turns to zero.
The first step is to stop using your credit cards and spend you cash instead. There are a lot of things you can do to get you started. You can cut up your credit cards but not to close your account. This can work if you can restrain yourself from applying for a card replacement. You can also try distancing yourself from those plastics. Keep it somewhere which is inaccessible or where it is inconvenient to retrieve. Be creative. From time to time, you might be tempted to use it. Best Advice: DON'T.
Psych yourself up to be disciplined. For REAL emergencies, you can keep one card that has the lowest interest rate.
If you have more than one card, then you need to prioritize. Select which one needs to paid off first, which card needs to be alloted a bigger portion of your payment fund, and which has the lowest or highest interest.
Most debt advisers recommend that you should pay more than the minimum to make a difference. Credit cards with the highest interest usually make the top list because they tend to compound quickly, thereby adding a significant increase in your debt amount.
If you have limited funds for repayment, you can try paying more than the minimum for the card with the highest interest whilst paying a bare minimum for the others. Some would argue that it is better to start with the biggest balance but it is better to cap the interest rate first because this increases with the balance while the principal amount remains constant.
Another way you can navigate around your budget is to stop spending on non-essential items. Sure, this can put a damper on your self-esteem, but it's definitely better than loosing everything just to cover your debt. Cutting back on luxury buying will leave you with more funds that you can divert towards repayment.
If you are late with your payments and have no immediate way of paying your creditors, it's important to be calm. Do not hide from your creditors. Be honest. Let them know that you intend to pay them, but at a slower pace because you are in a financial fix. Card companies will usually want to help you because they want to get their investment back. Very few will actually want to squeeze you dry. Those who do usually find that their debtors have disappeared. Try to negotiate for a lower rate or any other scheme that will make it easier for you to pay them back.
Never increase your credit card limit. An increased limit will only tempt you to purchase things that you actually cannot afford to pay. It encourages you to spend more and this you have to resist. Well, it will certainly reflect well on your credit standing but that standing will be the first to crash when you are unable to pay your balance.
An emergency fund is also a good idea. By having a fallback you can avoid taking out loans against your credit card, effectively freeing you from being a slave to your plastic.
These days, there are a lot of methods available to help you control your card debt. You can enlist the help of a financial adviser who can then assess your finances and help you choose the method that can work on your particular situation. Whatever game plan you choose, remember to follow through with it. Self-discipline is important. You have to want to be debt-free for it to work.
And next time, be wise. The next time you think of using your card, think twice. Do I really need this item? Is it worth all the trouble I’ve gone through the last time? Don’t be a FOOL.THINK!.
Published: October 04, 2007