Curtail Credit Card Debt

In our credit-crazed society, we are not even fazed by someone whipping out the plastic to pay for things like a cup of coffee or fast food. Whereas credit cards were once used only on an as-needed basis for rather large purchases, they have now become ubiquitous, and U.S. families are paying the price. The typical American household has a credit card balance of about $7,000 and spends $1,000 on interest payments each year. In these uncertain economic times, there aren’t many families who couldn’t desperately use that extra $1,000 for more important purposes. Still, we remain tethered to our credit cards and bogged down by high-interest debt. The good news is that climbing out of the red is not impossible, and we can tell you how.

More Borrowing Is Not the Answer

It’s highly unlikely that you will ever pay off your debt by borrowing even more money, as with car title loans, 401(k) borrowing, or unsecured personal loans. You probably didn’t get into debt troubles overnight, and you won’t be able to overcome them that quickly either. The bottom line is that digging out of debt is a time-consuming process that takes discipline and commitment. You have to pay considerably more than the minimum payment every month, and you should avoid liquidating valuable assets as a quick fix (e.g., home equity loans, investment fund loans, etc.).

What the Professionals Advise

No matter what debt counselor you consult, he/she will most likely give you some variation of the following five steps to tackle your credit card debt:

1. Stop borrowing. You will never catch up with your debt if you continue to spend frivolously and capitulate to impulse buying.
2. Record every expense. Without a ledger of your expenses, you cannot pinpoint areas of overspending or opportunities to make cutbacks. Keep a tab of all of your expenses, either on a weekly or monthly basis.
3. Make a plan with realistic goals. Don’t set yourself up for failure by setting unachievable goals. Instead, start with small steps, such as trying to keep your income higher than your spending every month.
4. Be patient. As with weight loss or almost any other worthwhile endeavor, overcoming debt has no effective overnight solution. You will need to have diligence and patience to get and stay out of credit card debt.
5. Seek out guidance when needed. If you’re at your wit’s end with your debt woes, it may be time for professional guidance from a debt counselor or financial consultant. One of the most appealing features of debt counselors is that their services are usually available for free or on a sliding scale.

Steer Clear of Temptation

Even after you’ve paid off your debt, you will have to monitor yourself to stay out of the way of temptation. The Ram Research group reported that the average household carries 14.7 credit cards (including gas cards, department store cards, and debit cards). A wallet full of plastic might prove too tempting, so try to limit yourself to just one or two cards, and use those only for true emergencies.

What is your estimated debt amount?

-- Select Debt Amount -- $0 to $4,999 $5,000 to $9,999 $10,000 to $19,999 $20,000 to $29,999 $30,000 to $39,999 $40,000 to $49,999 $50,000 to $59,999 $60,000 to $69,999 $70,000 to $79,999 $80,000 to $89,999 $90,000 to $99,999 $100,000 or more