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Card Debt - Strategies to Avoid the Debt Trap
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DontSpendMore.com
Plastic, that little card, has become omnipresent. From retailers to Web-based businesses, it has become the most preferred form of currency. Ease of use, flexibility, convenience of paying later, emergencies, and the need to build credit has boosted the popularity of credit cards to dramatic proportions. This increased popularity, though, has a cost of its own: credit card debt. Yes, credit card debt. Survey the people around you and you will be shocked to discover how much they owe in credit card debt.
The temptation to carry forward balances is the root cause of triggering a chain of events that lead straight to credit card debt. Have you ever wondered how to avoid getting into further debt and initiating the process to get out of it -- if you are already burdened by credit card debt. Let's discuss a few common sense strategies that you can adopt from this very minute.
Pay balances (all/most) every month -- on time. The purpose of a credit card should be for convenience, not to increase credit card debts. Pay balances each month. Even though you may be tempted to carry balances forward, don't! These little mistakes will eventually -- and with added interest-- assume unmanageable proportions. Don't be late with your payments. Late fees and penalties will further aggravate the credit card debt situation. Stick to your payment schedule.
Budget, budget, budget. Generally, impulse expenses hit us the hardest and land up
throwing all our budgeting off-board. Avoid them! If you see something
you feel like buying on an impulse, don't! Tell yourself, "I'll think
about it." You will often surprise yourself by realizing later that you
didn't really need that item at all. It was just an impulsive decision.
If you don't have the money to pay for what you buy (non-emergency
items), then wait. Hold on till you have the cash necessary to pay for
the purchase.
How does one budget? For starters, make a
list of things you spend money on. Maintain a journal and every time
you spend money on something, make a note of it. Analyze your spending
habits daily, weekly, monthly. You will be surprised to see how much of
the money you spend could be saved or used in a more productive manner.
Budget analysis. A careful analysis of your spending pattern will be the first place to start the analysis and budget exercise. See what expenses could be avoided; sometimes, doing things differently is all it would take to save money. Remember, necessity is the mother of invention. Once you know your spending habits, make a budget. What if you didn't budget? What would happen? You know the answer, don't you. Now, what if you did budget carefully? What would happen, then? Gives a better answer, doesn't it? You don't have to live like a miser; just being careful is enough. Smart budgeting doesn't mean killing your desires, it is all about being prudent.
Control the number of cards. Several consumers stack credit cards as if they were collectible items. Sure, it is nice to have thousands of dollars in credit lines, but what good if they lead you to credit card debt. Keep a few (2-3) cards and ensure they are paid-off in full (or to the best extent possible).
Avoid cash advances. Don't get tempted to withdraw cash using credit cards. Cash advance fees are very high and also cost hefty interest fees. Avoid them!
Review. Carefully review your credit card statements every month. Check for unrecognized payments and unreasonable fees. Keep records of all your purchases and counter-check to ensure they match what is shown on your statement.
Being free from credit card debt is a great feeling and we want you to experience it.
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