Does trying to make ends meet month after month cause more stress and strain? And if you're behind, you know that getting letters and phone calls all the time can really make you feel bad. If you like being treated this way, stop reading. Here's what you need to know if you're ready to do something about it.
What you need to do to get out of credit card debt depends a lot on how much money you make and how much debt you have. If it's still manageable, the plan below will help you get out of "credit card hell."
If you have any or all of these signs, you should be worried.
- Taking out a loan on one credit card to pay for another
- Accepting any credit card offer without thinking about it to get more credit
- Late payments are becoming more frequent
- Always pay minimums on your bills
You might be on the fast train to consumer finance Hell, thanks to your credit card company. A few years ago, banks and other financial institutions were able to make it harder for people to use even bankruptcy to start over. Add to that the fact that they can change your credit terms whenever they want, and you could be stuck with purchases you forgot about but still owe money on.
If you want to take back control from your creditors and credit card companies, you really need to get our free report on how to deal with this situation.
Don't let yourself get deeper and deeper into debt, because your options will keep getting worse until you're left with only the worst financial options. This is why if you think you're going to have serious debt problems, you need to take charge of the situation right away.
Using a credit card to buy something is the worst way to get the item. Know that a credit card is just a loan. To buy a CD or iPod, you wouldn't go to the bank, ask for a loan, and pay back the high interest rates every month. But because credit cards are so easy to use, it's hard to think of them as loans. Let's be clear: using a credit card is definitely like taking out a loan, and it's a very expensive one at that.
Know that every purchase you make with a credit card costs you money in the future. It's a loan! Even though credit cards are easy to use and convenient, they are also very expensive. Even though many credit cards have interest rates between 9 and 14 percent, they are usually set up so that the rates change over time. This means that even if your interest rate is 14 percent right now, it can and will go up at some point in the future. So, even if you think you have too much credit card debt, think about what could happen if interest rates went up by another 2%–4% or even more overnight.
A plastic-ectomy is the first step to getting out of credit card debt. Cut up all but one of your credit cards to save money for emergencies. By the way, an emergency is not a sale on sports tickets or a discount at the mall. By taking away your ability to get more debt, you've taken the first step toward getting rid of it all.
