With the financial innovation of credit cards, it has become perhaps too easy for the average person to maneuver themselves into trouble by mounting thousands of dollars in debt. In prior decades, a person seldom spent more than they had available simply because they couldn’t. Today, however, banks and credit card companies make a financial killing from your indebtedness, so it’s admittedly in their best interests to distribute credit cards to those with less than stellar credit ratings. Credit card debt is here to stay, and unfortunately few are immune to its seductive lure.
It’s not that the availability of credit cards themselves are immoral or unethical. We are simply much too dependent on them for basic, every day purchases like gas, clothing, or a fast food restaurant. It all adds up to greater debt which if not kept in check, over time this lifestyle could lead to a disastrous bankruptcy scenario.
To keep yourself out of credit card debt, some homework may be necessary. You should learn a bit about credit, how to mange it, and money in general. To get out and stay out of debt, creating a budget is an imperative. Write out a list of your fixed (i.e. non-changing) monthly payments plus a list of your optional expenses. Then make some tough decisions concerning items you want to own or activities you wish to participate in and how within your budget you can afford them. You need to be honest with yourself, realistic, and able to save money wherever you can. Determine in advance to stick with your plan to help yourself be strong in the midst of tempting credit card purchase opportunities.
Gas cards, store credit cards, and lines of credit all vie for your attention, trapping you in their high interest payment cycles. Do you really need them? If not, cut them up and cancel them.
When the credit card bills come due, it is tempting to make the minimum payment required on the credit card statement. The minimum payment is merely the interest. If you only pay the interest each month, you will be in debt for seemingly the rest of your life. However, if you strive to pay more, you will move toward debt freedom. So whenever possible, try to save enough to write a monthly check for twice the minimum payment.
And if you have several open credit accounts oppressing your finances, then consider debt consolidation to combine all your debts into one manageable payment. This step will actually save you money and certainly make your monthly bill payment process quicker.