It can take a lifetime to save, but it only takes a few a few seconds for someone to fall into debt. Are you in need of finding new ways to help take charge of your finances and put an end to high interest rates and annoying creditor calls? Here are a few really great articles that provide some insightful information on managing your credit card debt. Take a look!
1. Avoid getting caught up in debt .
Credit.com author Benjamin Feldman highlights some key factors that contribute to credit card misuse. According to him, credit cards are risky for a few reasons: “first, they make it easier to spend money that you don’t have. Research has shown that we feel more pain when we spend actual dollars than when we swipe a credit card to pay for a purchase. In other words, the credit card actually removes the discomfort of seeing hard-earned money leave your wallet. That’s why it can be so easy to get caught up in credit card debt.”
-Though it’s easy to rely on credit cards for most—if not all—of your purchases, try to rely on cash as your default form of payment. You’ll have a better idea of what you’re spending, and you’ll help avoid being caught up in the pitfalls of bad credit.
2. Live within your means.
In an article for USA Today, financial advisor Kelly Trageser writes about the importance of living within your means. “You should know what your fixed expenses are, such as gas, food and utilities and separate those from discretionary spending, such as dining out. Learn to live within your means. Using a debit card allows money to come out of your checking account real time. If you’ve spent your leftover money for the month, that’s it. Keep one low-interest-rate credit card in your wallet for emergencies only.”
-Discretionary spending can add up if you’re not careful. Though splurging every once in a while, is natural, try to keep tabs on how much and how often you use your debit and credit cards.
3. Take note of your spending.
Debt management strategies and ways to wipe out credit card debt are the focus in this MSN Money article. “Getting a handle on how you’re currently getting through your cash. It may sound incredibly boring, but try writing down, at least for a month or two, every cent you spend. You might be surprised by how life’s little luxuries (eating out, your daily newspaper, those regular trips to the coffee shop and so on) add up.”
-You’ll be amazed by how much you can save by simply making a list and cutting out all the needless expenses. It may be difficult at first but force yourself to keep track of every purchase—that way you’ll have a better grasp on what is and isn’t necessary.
4. Practice, practice, practice!
In an article for DailyFinance, author Gerri Detweiler outlines some of the more common strategies for debt management. “The No. 1 strategy listed by most respondents who said they paid down credit card debt in the past? ‘Started budgeting’ was chosen by 60 percent of respondents. As dreaded as the task of creating a budget may be, consumers seem to be aware that if they want to pay off debt, they had better start paying attention to where their money is going.”
-As if it hasn’t already been mentioned enough, budgeting is one of best (and easiest) ways to help curb your spending habits. Start budgeting and start paying attention to how often you use credit.
5.Know which cards have higher interest rates.
In this 60-second guide to getting out of debt, financial service company The Motley Fool emphasizes the importance of making consistent payments. “Be aggressive in paying down Bad Debt, but don’t get so ambitious that you risk missing minimum payments on your mortgage, automobile, or any other secured credit account.
-Take note of which debts have higher interest rates, and work to pay these off first. However, like The Motley Fool states, don’t become so caught up in one form of debt that you forget the others.
With the average American household carrying upwards of $8000 in debt, proper credit management has never been more important. For more information on our various credit management programs, visit CreditGUARD’s credit card debt page.