As the ‘buy now and pay’ later attitude continues to prevail in today’s society, an increasing number of people are getting into debt. This attitude toward spending money that hasn’t been earned is becoming a significant aspect of the American way of life.
It goes without saying that a credit card applications can lead to a very convenient and helpful way of paying for purchases, but as with all good things, caution must be exercised otherwise there could be some adverse consequences.
According to recent studies, the average family in America owes no less than $8,000 in credit card debt. The number of families who are way below this average is more than compensated for by those who are way above the average.
Comparing your credit card debt to this average, will help you determine the significance of your credit card debt situation. Just as Rome was not built in day, you are not going to be able to get over your credit card debt within a short space of time.
The chances are that it took you many years before you could accumulate your current debt. In the same vein, you need to be aware that it might take a similar amount of time to get over the problem posed by the bad credit no credit cards debt. Without a doubt, the psychological and financial benefits that can be obtained from clearing up your credit card debt can never be overemphasized.
Alter your spending pattern
In order to get over your credit card debt, it will be necessary for you to fully understand your spending pattern. You need to analyze your bills in order to determine if you use your credit card for unusual expenses like automobile repairs or for less important things like snacks and cosmetic products.
Using your credit card for every-day items is certainly a good way of increasing your debt at a rapid pace. Even the best credit cards should be used only for significant/unforeseen expenditure. Moreover, those credit card applications need only be used on an as necessary basis.
Avoid using all your credit cards
The simple solution to curtailing your credit card debt is to stop using your cards. This however, is easier said than done for most people. But with a little discipline and financial planning, it can certainly be achieved.
Getting rid of over-the-limit credit cards is perhaps one of the most important steps you can take. The fact is that you do not need the cards. They simply represent a source of spending temptation which you can do without.
When most people look at their credit cards statements, they usually notice that the larger proportion of their minimum payment has been applied to interest. This means that their actual balance is only reduced by a small margin. For many people, this can be quite frustrating.
The most effective way of solving this problem is by paying more than the minimum required amount. Doing this is sure to see you clearing up your balance in a more expedited manner. It does not matter if you can only pay an extra $10 each month, since this can go a long way in helping you reduce your debt quicker.
Transfer balances to better-rate credit cards
One of the most commonly used approaches to reducing credit card debt is making the most of balance transfer credit card applications. You can save a lot of money and get out of the debt quicker by transferring your existing balance to one of the many lowest interest credit cards through that credit card application you just got in the mail. You also have the option of transferring your high interest credit card debt to a lower interest home equity loan.
It is important to bear in mind that a substantial amount of discipline is required if this approach is to work. For example, if you use a home equity to pay off your credit cards, the only thing stopping you from working up your credit card bill again is self-control. Without this, you could find yourself in a very precarious situation indeed. There is even the potential of having the ownership of your home in jeopardy.
As a result of the growing debt problem, the demand for the so-called credit counselling companies have risen. These companies offer a debt negotiating service whereby they promise to obtain the best credit card interest and payments from your creditor. The truth is credit card companies are not legally obliged to deal with these credit counselling services, but they would do so if the only other alternative is bankruptcy.
Filing for bankruptcy – the last alternative
Bankruptcy should not be used unless your situation is really bad. Although, having your bad credit no credit cards completely erased might seem appealing in the long run but it always comes back to ‘haunt’ you.
This is because your credit record will be completely obliterated for many years, which means that you will be unable to obtain credit even when it is really needed. Since you want to get out of debt in the first place, this prospect might not seem so bad. However, bankruptcy means that you will have to have cash-in-hand at all times and for all spending occasions, no matter significant or unimportant they are.
Sometimes maintaining a low credit card debt is about as difficult as getting out of it. A good way to maintain a healthy credit card balance is to set your own spending limit below the card’s own limit.
For example, if your best card has a limit of $1,500, you can opt to impose your own limit of $600. That way you will always have your credit card debt under control and will have plenty of breathing space for unforeseen expenditure. Find the best credit card applications for you, then use them to help get yourself out of the debt circle.