Managing Credit Card Debt
A new year is here again
A new year is here again. Thus begins that time of the year where most people end up spending more than they usually do because of the bevy of events and holidays this particular period has. Thanksgiving, Halloween, and, of course, Christmas are but some of the occasions in this last quarter of the year has that tax our budgets more than taxes already do.
And in most cases, you'll end up putting most of your expenses on your little plastic friend. Before you know it, you've racked up quite a substantial credit card debt.
But just as this is the seasons of hope and celebration rather than of doom and gloom, managing one's credit card debt isn't as daunting as it seems.
One of the first things you have to look at is your credit card provider itself. If you still have it, look at the forms you signed and pay particular attention to the fine print. If you can't make heads or tails of it, ask a friend or colleague who knows the jargon, especially the legal background of the terms and conditions of your card.
It's important to know whether you're getting a fair deal from your credit card provider or they've hoodwinked you into signing your way into debt slavery.
If you think, or has been advised by reliable persons, that you're getting a bad deal from your provider, maybe it's time for a change. Immediately call the provider that you're cancelling your card and will just pay of the principal. If you can ask for an "amnesty" so that the interest doesn't pile up while you pay your credit card debt off, then that's even better.
If you're the type who can't live without a credit card, then look for one that offers a fair deal. This can help you in two ways: first, it will free you from the unfair practices of your former credit card company (and be sure to tell your network about them, too). The other thing is that credit card providers usually offer to absorb your existing balance from another provider when you transfer to them, usually at decent rates.
The latter is part of what's called "snowballing," and is best done if you transfer your current credit card debt from a high-interest provider to one with much lower rates. Even around two to three percentage points shaved off the interest from one card to another can mean a big difference in relieving the pressures you have in paying off your balance.
If you're cool with your current provider and shifting isn't an option, or not one you want to try (right now, at least), you can steadily decrease the balance of your credit card debt simply by paying more than the minimum required every month. This will ensure that you're making a dent on what you need to pay off, even if just in small steps, especially if you find yourself unable to not use your card.
Finally, a change in spending habits might be called for. Having a credit card greatly increases our ability to purchase things, especially if we do shopping online. Discipline is very much required when it comes to owning a credit card, and knowing when to buy and when to just stop pressing "add to cart" can spell the difference in your attempt to crawl out of the debt hole.
Credit card debt can be daunting at times, especially these days when the economy seems to be struggling - out-of-control debt was what tanked it in the first place, after all - and many jobs are at risk. But if you keep your wits about you and know when to quit when the buying madness gets a hold of you, getting out of the debt trap won't be as hard, and won't have to cost you an arm or a leg. Or a kidney.
by: Dan Cavalli
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