Clawing Your Way Out of Credit Card Debt

If you are finding yourself buried in credit card debt, it is time to take control of your finances and to quit sending the credit card company all of your cash. Follow these simple steps to claw your way out of credit card debt and stay there

First, if you have a bunch of credit cards, you really need to get rid of some of them. The more cards you have, the more likely you are to overspend. For most people, there is really no reason to have more than 1 or 2 credit cards.  Hang on to the card or cards with the lowest interest rate or other benefits. And, keep the card you have had for the longest period of time. That way, your credit history remains intact. When you do decide to actually close an account, make sure it is paid in full first. Otherwise, the credit card company may charge you a higher interest rate until the balance is paid off.

With the cards you do decide to keep, make sure you only use them for emergency purposes or when you have to make purchases online. And, no, an emergency purchase is not that cute pair of shoes that are on sale or the great tool you just found down at the hardware store!

If you do continue using your card for regular, every day purchases, make sure you pay off the full amount at the end of each billing cycle. Otherwise, finance charges will build up on the card and put you further into debt. If you are already in more debt then you can pay off each month, make sure to pay more than just the minimum monthly payment on your credit card. That way, you can start chipping away at the principal rather than just paying off the interest each month. Even sending $20 more every month will get you paid off faster and will save you money in the long run.

 

Are you too weak to resist making those impulse purchases? Try putting your rewards credit card in a Ziploc bag full of water and putting it in the freezer. By the time the bag melts and you get your credit card out, you should have had time to think the purchase through and come to your senses!

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