Debt Consolidation Blog

There are countless people stuck with credit card debt.  What started as strictly emergencies became everyday purchases. If you have more credit card debt than you can handle, there are a variety of options available to you. Here is a step by step guide for how to deal with credit card debt:

       Find out where you are. The most important part of tackling your credit card debt is knowing exactly how much of it you have.  Open those bills, and check your online statements.  Tally up your totals and look at the big, scary numbers.  You simply can’t take care of a problem without knowing how big it is.

       Examine how you got here.  Look over your purchase history.  Are you using your credit card for purchases that are realistic?  Remember that unless you pay off your credit card each month, you are paying interest on any and all purchases.  That means the $45 dinner and drinks tab from 4 months ago is now over $70.  If you had paid cash that night, you would have saved $25.  Look at what you are spending your money on and what you could live without.  Did you need a new sweater or television last month? 

       Make a plan. A budget is not a scary thing.  It is not even all that complicated.  Just pull out a blank piece of paper and make two columns.  Fill out one column for money coming in, one for money going out.  Living within your means is the only way to get out of debt. After you see what you have been spending your money on, you will have a realistic view of how much you typically spend on certain items.  Consider things you can get rid of while working off your debt. 

       Tackling your debt. This can seem overwhelming at first, but with some careful thought the whole process can be quite manageable.  After you listed everything in your budget, look at what money you have left over.  Look at which credit cards or loans have the highest interest rate.  After you have paid the minimum on each loan, use the extra cash toward your highest interest loan.  This is likely a credit card.  If you have defaulted on payments in the past, this could be up to 32%.  You can also consider transferring your credit to a lower interest card but make sure to read your credit card agreement.  This is not always allowed.

       Get Help. With so many people in debt these days, there are plenty of agencies out there willing to help.  Always make sure to research any business with the Better Business Bureau before handing over any money.  Scams are rampant, and especially with the current credit crisis, it is easy to turn to the wrong business.  Protect yourself, but don’t miss out on an opportunity to slash your debt.

       Hopefully this will be a lesson you take with you the rest of your life.  Living beyond your means is not healthy and can cause you many unwanted results.  Nobody likes harassing phone calls and nobody likes living without.  Consider a part time job for increased revenue or taking up a cheap hobby while you are working off your debt.  Having excess credit card debt is sometimes a necessary evil, but most of the time it is unnecessary.  As you are working off your debt consider paying for everything in cash.  Wait until you know you can use your credit cards responsibly, until then keep them in a cabinet or in the freezer!

Articles on this site have been acquired from a variety of sources.  No content on this site should be considered financial or legal advice.

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