A Guide To Credit Card Debt Management

By Sean A. Kelly

Credit cards may be one of the most convenient tools to help you through life. In fact, in the American culture, credit cards have become a lifestyle. When used wisely and smartly, credit cards may actually help you in times of emergencies and also help you establish a credit history that might help you obtain a bigger loan later in life. However, if you are not careful, you might end up accumulating more debts than you can actually handle. If that should happen, you might be in need of credit card debt management help.

Learning to manage your credit card usage is one thing but learning to curb your debts may be a completely different thing altogether. How do you know if you are in need of a credit card debt management program? There are many tell-tale signs. You may need to be able to distinguish the many different bad credit card habits to see if you do need some advice on how to manage your credit card debts. One simple question is if you have been buying household groceries on your credit card. Generally you should be able to afford your groceries in cash. So if you are buying your groceries on the credit card, it probably means that you are unable to manage your finances wisely. You might also want to ask yourself if your total outstanding balances on your credit card is more than your annual income and if you even can afford to pay off that balance within a year. The rule of the thumb is that your debt should never be greater than your income. So, if you do have a balance that is more than your annual income that you can’t afford to pay off within a year, you might need some help in managing your debts and enroll in a debt management counseling program.

There are still ways for you to curb your own credit debts, by following a few simple do-it-yourself steps, which may seem easy but can be quite difficult to execute without a very strong determination. It has been suggested that the first step towards eliminating your credit card debts, is to stop using your credit card altogether. This is of course very logical because, you may not want to accumulate new debts as you are struggling to be rid of your existing ones. This may have to do with your spending habits more than anything else. You might find living on cash a bit difficult at first but, over time, you might get used to it and perhaps end up saving much along the way. It might also be a good idea for you to prioritize your spending and only spend whatever cash you have on things that you need, such as food and utilities rather than spending them on cable TV or luxurious items.

You might also want to consider various alternatives on how to settle or consolidate your debts. If you are having a tough time keeping track of several credit card debts, it might be a good idea to roll all your unsecured debts into one single entity and make payments to only one creditor. You may do that by getting a debt consolidation loan or by moving the balance from several cards to one single card with a lower interest rate. There are credit card companies that offer 0% interest rate cards. You have to bear in mind that consolidating your debts does not necessarily mean that you will be getting rid of your debts all at once but, you are merely buying yourself some time and allowing yourself to pay off your debts in a manner that you may be able to afford without really tightening your purse strings.

You might also want to consider putting as much as you can in every payment. If the calculated minimum payment is merely the accrued interest, it is advisable that you double that figure in order to hit the principal of the debt. It might be a bit painful at the beginning but, you might find it to be quite liberating as you may be able to pay off your debts sooner than you might expect. By hitting the principal amount you might begin to see the balance dropping steadily as you continue to make more payments.

Enrolling in a cc debt management program may also be an option especially, if you think you are a compulsive credit card user. However it is recommended that you try to manage your debts by yourself first. This is because, in most cases, the reason for being in debt in the first place lies in your spending habits. If cutting up all your credit cards might seem a little bit too extreme for you, you might want to keep only one card and preferably the one with the lowest balance. Keep in mind that it is always better to nip the problem in the bud before it gets out of hand.

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