How To Practice Fine Debt Management

Control is the key to debt management

Control is the key to debt management. Everyone needs something, at one time or another, that they cannot afford. So, they put it on a credit card. If the need is there, the card provides the convenience to pay for it without your own money. But you need to control the urge to continue to spend on the card, before you find yourself deep in debt.

Statistics show that no one person, with a steady job, should have more than two credit cards. One should be for emergency use only, and the other may be for play. The emergency one will be great if you control it, because you will always have the funds to fix your car, if something goes wrong, or take care of that dental pain, or whatever. But you should make sure that you pay it off as soon as possible, so that it will be available for the next emergency.

The second card can be your fun card, if you like. But don't overdo it. You can buy that great pair of shoes you have had your eye on, but pay it off right away. Then you will have it for the next pair of shoes you see in the coming seasons. Think of your cards as short term loans, because that is what they are. But the interest on these cards will drown you in debt, if you do not pay them off in full as soon as you can.

When things get out of hand, and they can very easily, you may need a third credit card. But this one will be to pay off at least one of the other two. And it has to make sense to do this. In other words, the third credit card needs to have a zero interest rate for at least a six month period, and you need to get rid of the card you transfer the balance from. That means that you have to cancel the first card completely. You will pay it off by transferring the balance, but you need to get rid of it completely.

Paying off the cards and getting rid of the high interest ones is the whole point. If you keep the cards in your wallet, you will probably spend on them. And this is dangerous.

If your bill comes at the wrong time of the month and you always seem to be scrambling to get it out on time, change the billing date. It just takes one phone call.

If you do accidentally miss a payment, do not stress about it. Call your creditor and tell them about your mistake. If you have never made an error like this before, they will believe you, and they will accommodate you by deleting the overcharge for a late payment, along with any other late fees. It pays to ask, and to communicate, when you want to control your debt management.

by: Alan Nottingham

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