3 Easy Tips to Reduce Your Credit Card Debt
Most of us know how "borrowing too much" feels.
Especially now, when millions of American families are being bombarded with billions of credit card applications from banks, department stores and credit unions.
Even as the economy worsens we continue to be inundated with offers of credit.
In 2008, issuers sent 4.
2 billion credit card offers in the mail - nearly four times as many as the 1.
1 billion sent in 1990.
It is hard to resist temptation to breach the gap between your income and ambitious living standards using an "easy" credit, ignore the piling up balances, outrageous interest rates and hope for..
I have no idea what people who accumulate tens of thousands of dollars of credit card debt over years of reckless spending are hoping for.
Inheritance? Winning lottery ticket? Hardly a sound financial strategy, isn't it? According to Consumer Union report, as of 2007, 73% of all American households had credit cards and 60% of these households carried a balance.
The average balance for households that carried a balance was $7,300, up 30.
4% from 2004.
Low- and middle-income households have an average of $8,650 in credit card debt.
Now its time to examine the spending habits that allowed the debt to pile up and look into various credit card debt solutions.
First and foremost, make a budget.
Yes, right, the old boring excel spread sheet where you meticulously document every purchase no matter how insignificant it might seem.
Separate "must have"s from "nice to have"s, and make sure that the former get paid for in cash first.
Try to budget more than minimum for credit card payments, in order to hit the principal along with interest payments.
Now, consolidate.
It it one of the most recommended credit card debt solutions as it allows you to reduce your interest rate and see your balance dropping a lot faster.
Keep in mind, it demands a fair amount of financial discipline on your side.
Choose one card with lowest interest rate and transfer all the debt to this card.
Destroy all cards but this one and use it only for emergencies (sudden realization that you do not have shoes to match your new purse does not count).
Leaving it at home when going shopping will make your life a lot easier.
Stop acting rich, concentrate on becoming rich.
Accept the fact that there are certain things you can not afford.
Right now.
Too many people over-spend trying to appear rich, effectively jeopardizing their chances of accumulating any wealth in the future.
The rule of thumb is simple - do not spend more than you make, and try to save at least 10% of your pay check once you are happy and debt free.
Especially now, when millions of American families are being bombarded with billions of credit card applications from banks, department stores and credit unions.
Even as the economy worsens we continue to be inundated with offers of credit.
In 2008, issuers sent 4.
2 billion credit card offers in the mail - nearly four times as many as the 1.
1 billion sent in 1990.
It is hard to resist temptation to breach the gap between your income and ambitious living standards using an "easy" credit, ignore the piling up balances, outrageous interest rates and hope for..
I have no idea what people who accumulate tens of thousands of dollars of credit card debt over years of reckless spending are hoping for.
Inheritance? Winning lottery ticket? Hardly a sound financial strategy, isn't it? According to Consumer Union report, as of 2007, 73% of all American households had credit cards and 60% of these households carried a balance.
The average balance for households that carried a balance was $7,300, up 30.
4% from 2004.
Low- and middle-income households have an average of $8,650 in credit card debt.
Now its time to examine the spending habits that allowed the debt to pile up and look into various credit card debt solutions.
First and foremost, make a budget.
Yes, right, the old boring excel spread sheet where you meticulously document every purchase no matter how insignificant it might seem.
Separate "must have"s from "nice to have"s, and make sure that the former get paid for in cash first.
Try to budget more than minimum for credit card payments, in order to hit the principal along with interest payments.
Now, consolidate.
It it one of the most recommended credit card debt solutions as it allows you to reduce your interest rate and see your balance dropping a lot faster.
Keep in mind, it demands a fair amount of financial discipline on your side.
Choose one card with lowest interest rate and transfer all the debt to this card.
Destroy all cards but this one and use it only for emergencies (sudden realization that you do not have shoes to match your new purse does not count).
Leaving it at home when going shopping will make your life a lot easier.
Stop acting rich, concentrate on becoming rich.
Accept the fact that there are certain things you can not afford.
Right now.
Too many people over-spend trying to appear rich, effectively jeopardizing their chances of accumulating any wealth in the future.
The rule of thumb is simple - do not spend more than you make, and try to save at least 10% of your pay check once you are happy and debt free.
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