The good news is that there is a way out of credit card trouble. It will take time, patience, and discipline. But be assured that there are proven strategies you can employ to help solve the problems of ridiculously high credit card apr and enormous outstanding balances. Whatever your situation you must remain calm and believe that there is light at the end of the tunnel.
The dirty little secret about credit card holders is that they fail to pay them off every month or to make the monthly payment on time. Statistics reveal that half of all card holders are dead beats when it comes to their credit card bill. It doesn’t help that a majority of credit cardholders are not familiar with the terms or interest rate of their cards.
Here is a typical scenario… You have a $1,000 balance that you are carrying on your credit card every month. One thing you might not realize is that at an 18% rate the balance will cost you $180 a year in interest charges. This is assuming that the credit card does not carry an annual fee. But you better prepare yourself for a surprise! Most cards do carry additional fees, and if you think that the points or perks that the rewards card offer you are free….hold on tight. Credit card companies don’t give you anything for free.
The shock you will experience when you find out what the "hidden" fees are will be palpable. If you think that splitting your debt up onto many different credit cards will help lower your rate or fees then you are in denial about the facts. You are way better off having just one card, so that you don’t have 5 or 10 different contracts to read, decipher, and worry about paying off every month.
It is a much simpler proposition to control your finances if you do not let them get out of control to start with.
If one or more of these warning signs apply to you then credit card trouble is not far away:
1. You don’t pay the balance of the card off every month. Rather you make minimum payments.
2. You are late making payments or just skip making the payments all together.
3. You have maxed out your cards or are close to maxing them out.
4. You are committing the unforgivable sin of paying one card off with another card.
5. You don’t realize how much money you owe on each card. How the heck does that happen?
6. You can’t sleep at night because you are freaking out about your credit card trouble.
7. You basic bills are being paid with credit cards rather that with your paycheck.
8. You play hide and seek with your credit card debt. What this means is that you are constantly transferring your unpaid balances from one low introductory rate card to another. This strategy won’t help you or solve your problems. You need to make a decision to take care of your credit card trouble before it takes care of you.
There are certain steps you can take that will start you down the path of financial responsibility:
1. Don’t lie to yourself about the financial situation you find yourself in.
2. Sit down and figure out exactly where you stand financially. Find out exactly how much you owe on each card and what the interest rates are for each credit card.
3. Figure out what reasonable amount you can take from each and every paycheck to start paying off your credit cards at the end of every month.
4. If the credit card debt you carry is just too much for you to financially handle, then you might want to look into consolidating your debt with a loan from the bank that will carry a lower interest rate.
5. If you have assets you can sell off, such as stocks, extra stuff in the garage, a second car, etc. you should. Use the money you get to retire credit cards that are draining your bank accounts with high interest rates.
6. Always without fail pay the minimum on each card each month. Never miss a payment.
7. If you have extra money left over every month use it to rid yourself of the highest rate credit card balance.
8. Stop!!! Swear off the use of credit cards. If you are in a hole it doesn’t make sense for you to keep digging. A good strategy is to cut them up and be done with them.
Cash has always been king. It is also king when it comes to buying and saving. When you consider that you won’t have to pay interest or fees on your purchase the savings start to really add up. A really good thing about using cash is that you can always afford what you are buying.
Every credit car offer sent to you in the mail should be considered an offer for an instant bad credit card. Stay cautious and stay aware. You should do whatever is necessary to avoid credit card trouble.
No trouble is enough.