Credit Cards in 2009
2008 was a rocky financial year for most everyone in this country. Many were at a loss for what to make of their economic futures. As consumers look to 2009, many are trying to regroup and figure out a plan for their financial futures. Some have spent within their means and will be able to recover. Others have racked up debt on their credit cards and are seeking ways to reduce or erase that debt. It is estimated that the average number of credit cards per consumer in this country is four. Credit cards have become a staple in everyday financial transactions. They are a convenient and useful tool, if used responsibly. But credit cards can also offer an opportunity to overspend. Once debt is accumulated, it takes a disciplined routine to climb out of it.
The first step to reducing and eliminating debt on your credit cards is to stop making purchases on the cards. It may be common sense, but erasing debt while you are accruing more is not easy. Do not open accounts for new credit cards when you stop using the current ones either. Simply change your habits. Start using your check book, debit card or paying with cash. Next, examine your budget to determine where you might be able to cut expenses. The most logical area of your budget in which to do this is discretionary items. Stop eating out, going to the salon, paying to have your car washed and purchasing entertainment items you do not need. Take the money you save on those discretionary items and put it toward the balances on your credit cards. You may need to temporarily take on additional income opportunities, if you find that you have no discretionary expenses to reduce.
Once you clearly understand your finances, make reducing the debt on your credit cards your priority. Make more than the minimum payments on the monthly statements. When you make only the minimum payment, you are paying a significant amount of interest. You will actually start chipping away at the balance, when you make more than the minimum payments. Work on the card with the least amount of debt first, if you have debt on several credit cards. The emotional benefit of seeing some debt paid off will offer a reward and let you see the light at the end of the tunnel. Send in additional payments on your credit cards, if you ever have free funds. Once you start paying off your credit cards, close the newest ones and keep the oldest. A card that has a long and solid history with you will help your credit score. Keep up this routine until all your credit cards are paid off. If you start using your cards again, remember how hard it was to pay off debt. Stay on top of your balances and use your card wisely. Remember that you will have to pay for everything you put on your credit cards.
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by: barrywaters
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