Credit cards are a nice convenience. However they are the worst way to borrow money. Credit cards are the most common form of “open ended” or revolving credit. Most people have at least one credit card, and often many more than one. Credit cards are easy to use, they are easy to understand, and they are highly familiar to people.

Credit cards are said to be revolving credit because they charge interest on the money that has been borrowed and not repaid in full at the end of the billing cycle. Credit cards are, for all intents and purposes, revolving credit loans. Credit cards are sometimes simply necessary . Credit cards are not a good option for long-term (greater than six months) borrowing. You only need one card for emergencies and to establish a positive credit history.

Consolidating your credit card debt simply means turning multiple balances into one by transferring all your credit card debts onto one card. Besides giving you the convenience of only having to make one monthly payment instead of several, consolidating credit card debt is really about saving money by finding the best interest rate possible for the sum total of your debts. Consolidation generally reduces the total amount paid out each month, and may also reduce how long you will be in debt. Remember that if you choose a consolidation loan, you should close out all but one credit card account.

Consumer debt can be associated with Predatory lending , although there is much debate as to what exactly constitutes predatory lending. Consumer credit counseling program and Christian credit counseling are parts of credit counseling. In a Consumer credit counseling plan a credit counselor will discuss your financial situation with you. Consumers believe those awful tales spun by collection agencies of impending doom, especially about garnishment and seizure of property. Collection agents fail to mention (surprise!) that in order for these actions to take place, the creditor must first go to court.

Consumer spending accounts for more than two-thirds of gross domestic product, and residential investment–the construction of new homes–makes up another 4 percent or so of GDP. In addition, households own more than $14 trillion in real estate assets, almost twice the amount they own in mutual funds and directly hold in stocks.

Credit card debt is a significant factor in many bankruptcy cases, and nearly $20 billion is discharged in chapter 7 cases per year. Cases where the debtor has at least $50,000 in credit card debt account for nearly one-third of this amount. Credit card debt is an unbearably heavy burden borne by millions of Americans. The pain of this burden is often exacerbated by bed spending habits and poor money management. Credit card debt is one of the major forms of debt in the US and in many parts of the world. Credit cards have made it easy for the average consumer to take out what amounts to an immediate loan for both purchases and cash advances.

Credit card debt is just the tip of the iceberg, but if you’re combining credit debt with a mortgage you’ve got to be doubly aggressive about tackling both debts as soon as possible. Credit card debt is considered to be an all time problem for the individuals, and they tend to sink further and further, if they continue to use it . Credit card debt is always an uphill battle but we’re moving in the right direction. It’s just a matter of time before all the credit card debt is gone.

Many people don’t like to talk about their credit openly. I can really understand that. It’s somewhat personal and private information. The world really revolves around your credit. Very important things in life are granted and given to you if you have good standing credit. Things like cars, houses and even minor luxury items such as a family boat. Nothing crazy, just a very basic boat. Wouldn’t that be nice?

But here’s the thing, if you don’t have good credit, it’s really hard to get any of these things. For those who do have average credit, it’s like your going to be punished for having just average credit by being approved for a loan with a higher interest rate.

In many ways, it almost seems backwards. Many folks who have suffering credit have it for a reason. Money is tight or you might have had a bad month at the job, things like that. It would seem like for the folks who are struggling that they should be given the break and honored a low interest loan of some kind. For the folks that do get approved, they end up working twice as hard and sweat twice as many bullets towards paying off the approved high interest loan.

Quite the opposite happens to folks with outstanding credit. Life is a breeze as they coast by having amazing loan offers with very low interest rates. With all that being said, to me and in my experience. Sometimes having no credit is the best line of credit.

Back in my early twenties, my wife and I had a hell of a time financially. We had a kid very early in our relationship, my wife already had one of her own. We both were working just very average jobs and lived in an apartment. Things were very difficult. At the time; however, we both had amazing credit. When you’re young and in your twenties, everyone will approve you for credit cards, loans, etc…

We really had no choice but to live off credit cards. We didn’t make enough money to pay the bills, purchase food and pay for things like clothing or school supplies for our two kids. As the years went by we got into quite a bit of debt. Needless to say our credit suffered very badly. Eventually we paid all our debts as we continued to advance in our careers and make more money. But we sure did pay a hefty price.

Today, my wife and I don’t use credit cards. We have re-established our credit by way of paying our mortgage always on time and successfully paying off our auto loan. But because of that experience we had in our early twenties, we will never get a credit card again. We stand by the theory that if you can’t afford something to pay cash for it right then and there, then it’s not worth purchasing.

If I want something, I spend a long time thinking about it and question whether I really want that item or not. Really I have no choice but to think about it as I have to save money up to make the purchase. So really, when I say no credit may be the best line of credit what I really mean to say is that by not using credit cards, it can be your best defense against getting yourself or your family into a financial jam.

Did you know that 21% of all college students graduate having over $7000 dollars in credit card debt? Amazingly 83% of all college students have at least one or more credit cards and actively use them in daily spendings such as paying for gas, clothes, books, food and board. College students that max out their credit cards and then make only the minimum payments on them, it will take over 8 years to pay their credit card debts.

It is recommended that instead of seeking out the approval of credit cards, to get a part time job during your college days to use that money in replace of a credit card. Also college students have the option of seeking out a low interest education loan which would have cover the cost of tuition, books and housing. College students are leaning these financial lessons the hard way.

Here is a very touching video I found on YouTube that illustrates many of these facts and how it has impacted the life of one college student who is now working hard at getting out of credit card debts during her college years.

Students in college already have enough stress just being in college. For many, college is a very expensive venture and a financial risk that is being pursued for a chance to have a better life financially with the goal in mind of earning a degree to land a better job in the work force. College typically doesn’t only bring a great education but it can also leave a student scarred from credit card debt.

A large number of students are faced with the challenge on how they can pay for college tuitions. While there too is a large number of student who were lucky and found grants and proper loans to pay for their college education, still their typical living expenses aren’t covered. Many students seek out part time jobs and work around the clock balancing class schedules and their minimum wage jobs. Needless to say, college has its challenge in a multitude of different stresses.

Combine all these elements and then consider your reaction if you were back in college facing these same issues and a credit card company representative confronted you with an offer of financial and stress relief. Consider how tempting the offer to apply and get approved for an instant $5000 that can be used to cover the cost of food, books, gas, rent and other things that are needed in the typical lives of college students.

In a more recent story published by Meghan Pesch titled, Banks and credit card companies target college students through partnerships with universities, you will discover the large lengths credit card companies take towards getting students to apply for their credit card offers. Credit card companies are targeting college students for credit card approvals. They will go so far as to troll around on college campuses seeking out their victims. The problem with this is the fact that a large number of credit card offers being presented to college students aren’t really the best option for most of the students.

While, indeed, many college students to live very stressful lives financially, by applying for a credit card and getting approved for a larger line of credit, $5000 or more, this doesn’t set the student up for a very peaceful road in the upcoming future. The results are typical and commonly lead to students being forced to pay on their credit card debts for many years to come.

While applying for a credit card may seem like a quick and easy solution to relieve the financial stresses of college students, I would strongly consider alternative options, such as hitting up mom and dad for some interest free money. The problem in this situation is simple. A large number of college students leave college with a wonderful education but also leave being in debt which will take their entire 20 year career to pay for.

How a family can get out of credit card debt
Written by Shane Higginbottom

This may sound a bit corney but it is true in our lives and worked for us.
You have to have a purpose a raison d’etre and a goal in mind.
Our goal was to buy a house in the coming year.

Our personal credit card horrow story goes back five years.
When I first met my gilfriend she was in a nasty child custody battle for her son. Being the committed
boyfriend that I am and having the available credit.
I decided to help her out by paying for some of the lawyers fees using my credit cards. The total fees at the end of
the custody battle were well into the 20k range.

Which really tapped our available resources and were bleeding us dry monthly.

That and we were both very irresponsible with our money, eating out, going to movies ,concerts shopping. The list goes on.
It gets worse we started going to the payday loans places to make ends meets, pay credit card minimum payment, rent food and bills.
Until the fateful day when the piper came a calling and some of the bills went to collection, hydro threatening to cancel, phone threatening to cancel.
What we didnt know was that our incomes were sufficient at the time to more than pay for everything.

But like I said our irresponsibility with money and credit cards blinded us.

Here is how we did it and its a plan we used to get out debt and buy a house in just under 6 months.
I would say cutting up our credit cards helped but there just wasnt room on them to be using them.

Our plan went like this:
We decided to live frugally
We added up our income.
Made a list of everything and everyone we owed.Starting from our expenses and the fixed amounts that we knew
wouldnt change.
Ie:
rent,
heat,
hydro,
cable,
phone,
internet,
car payment,
life insurance,
house (apt)insurance,
Car insurance.

We made a deal with the lawyer to pay monthly. An added fixed cost of 300/month

Now about the credit card debt, which was over 20 k.
We had to swallow our pride and just fess up and admit that we screwed up and called our credit card companies.

What we were looking was a payment agreement and a lower interest rate and at first try we werent all that successful until out of
desperation (we called numerous times) and basically told them that we were on the verge on just our right declaring bankruptcy
and that if we did then they wouldn’t be seeing any of the money.

What the credit card company asked for was if we could make a lump sum payment of 8k. I almost fell off of my chair here I was asking to have the amount of
interest lowered and make a payment arrangement because we were cash strapped and they wanted 8k?

What we managed to do was to call friends and family and explain our sordid situation and asked for help as a gift that we might or might not be able to return.
This took alot for us to do.

In the interim we went back to basics and cancelled our cable one of the 2 cell phones, bought bus passes instead of driving the car and paying gas.
Went to food kitchens and food places that help out the poor with handouts.

All to save money which we would be using for the lump sum payment.

Then it dawned on us that we had 3 credit cards all with differnet interest rates.
What we did with the money we had managed to save was paydown the lowest balance first, not the highest interest rate first our thinking was that it would
free up money to go to towards the others with higher interest rates.

And the difference went to our lump sum fund.

SO for instance we had three cards which were maxed out 2k @ 9% 8k @ 18% and 10 k @ 12.5%
We realized that our monthly income was approx 5800/month and that after writing everything down that our monthly fixed expenses were
approx 2297$ (3000$) but were overspending by about 1700 month on other things like shopping, movie rental, going out for dinner.

We never did manage to convince our friends and family to help us out. Sad really. When you need a leg up in the world that it isnt there.
So we did on our own.
By trimming down our fixed expenses ie car insurance (cancelled it) no car for a while. and no gas. cancelling our cable eating from food kitches bi-weekly
and having our families help us out with the food bill.We managed to save just over 1000/month.
We didnt manage to pay off all of the credit cards but we made a good dent in them and got our personal finances under control.
What’s intersting and this might be a good lesson for you out there.
Is that banking and finances and getting credit is really not tied too closely to the real world. What I mean is that, when it came time to
to start looking for a house we realized that we would have to get a downpayment togethor.
Which wasnt really anywhere on the horizon honestly, considering that we couldnt save. But what the bank wants to see is numbers.
In our case they wanted to see 12,586 dollars in our account. approx 5% down payment.
What was alos intersting was that when our mortgage broker pulled our crdit bureau information. (beacon score) for one reason or another
It was pulling information from before my credit meltdown, so I looked numbers wise (again not reflected in the real world)
This gave us some bargaining room with some of the people we wanted to have help us out with getting a mortgage. So what we did was again go to the well
of our friends and ask them for money which we would payback immediately. How did we do that. Our bank at the time was offering a 7% cashback mortgage.
So we pulled the numbers togethor from our friends telling them that in 10 days their money would be repayed from the cash back.
Again just showing the bank numbers that had nothing to do with reality. So in essence we got our first house with nothing down and some money to spare.

Living with Debt & Its Solution
By Erik Wyche

Having been down the road of debt, which ended up in me filing for bankruptcy, I can provide some insights into preventing you from reaching such circumstances. The first hurdle to overcome is being able to acknowledge the problem. If you are in debt, you’re not alone. The average family owes upwards of $9,900 just on credit cards. If your monthly expenses, including debt, exceed 65 percent of your income, you should be very aware of what’s going on and take a hard look at your finances. The best advice I can give is to not ignore the problem. The bills are not going away so you must face the problem and solve it.

An issue I had was thinking about the daunting task of digging myself out of this hole. To me it seemed like a process that was going to take years to fix. Advice that I give now is that you might not be able to become debt free in 30 days but stop spending for 30 days. Stay away from the plasma TV that is being offered interest free for 12 months and do not even bother going to the mall.

In those 30 days you should be looking to see if you could get your mortgage at a more favorable rate. This will lower your monthly payment to free up some cash to tackle other debts. Credit cards should be consolidated if possible or at least transferred to another card of yours with the lower interest rate. One mistake people make though is that they close the accounts with $0 balances. You should keep these accounts open. Closing them can actually hurt your FICO score. On the flip side, do not go out and open a bunch of accounts either, as this will also hurt your FICO score. If all your credit cards currently have high interest rates just pick up the phone and give them a call to see if you can get lowered. You will be amazed at how cooperative they can be.

Once you have freed up some cash do not fall into the trap that now you can go and spend. This is not a shift-debt strategy but a zero debt strategy.

Once you get some breathing room, something I could not get accomplished, you need to figure out a long-term plan. This means you need to come up with a budget. The word most Americans do not comprehend that entirely well. How well do you know what you spend? Most cannot answer that question with any certainty. Grab a piece of paper and write down what income you do bring in and expenses. This will give you a brutally honest picture of you finances.

Once you have a budget stick with it. Pay down you debt and be disciplined. Make sure you understand the order in which the debts should be paid. All secured loans should be top priority. You have put collateral up and if you do not want it taken from you these debts must be paid first. Do not skip credit cards but they should come after secured loans. Credit cards also have an order in which they should be paid. The cards with the highest interest rate are first to go. Remember, stick to your budget.

A key to making your budget work is having enough money. Here are some tips for holding onto you cash:

• Brown-bag it to work
• If you have a 30-year fixed-rate mortgage, making a payment every three weeks instead of every month can drastically reduce the length of your loan.
• Learn to love leftovers
• Save on postage by paying your bills online
• Bundle you media services
• Wash your own car
• If you are going to be out the room for more than 5 minutes, turn off the lights
• Use your debit card for purchases instead of your credit card.
• Go grocery shopping with a list and stick to it.
• Shop out of season when prices are lower
• Bike or walk instead of driving when possible
• Buy an artificial Christmas tree
• Stop smoking

Of course there are many more ways to save money but this will give you an idea of what you need to do.

Finally, never give up. You don’t want to fall back into the mess you were in. There are always going to be ups and downs in the economy, but if you follow the simple money management rules you will succeed. I know I have learned my lesson the hard way but I now follow these rules and I am able to keep my head above water. You can to.

Seven Steps to Exploding Your Credit Card Debt into Tiny Pieces of Nothing
Written by James Hobbs

With all the clamor and noise over debt reduction and credit card debt from the credit counselors, debt consolidation companies, the lawyers who will help you (for a fee, no doubt) and bankruptcy court (for the real basket cases) you would think that managing a household budget requires an MBA, or at least your own personal ATM.

Well, Jim Dandee is here to tell you that just ain’t so. You can get out of debt on your own, and it doesn’t take going into more debt to do it. Even if you believe there is no way possible to squeeze one more drop out of your budget, get the wringer out anyway, we’ll be squeezing in places you may not have thought of before.

OK, here we go:

1) Stop charging new debt! Sir, Madam, step away from the credit card! And put your writing hand in your pocket for a while—no more new loans! None!

2) Create a budget (or a spending plan, if you prefer). You have to know where your money is going! Every penny counts! Don’t believe me? Maybe that’s why you’re here in the first place—because of not heeding sound financial advice… (insert cow-pie eating grin here). If you don’t know where your money goes, how do you expect to control it? People tell me I’m a blunt kinda guy (people tell me other things, too, but that’s another topic), but it’s only because I care (plus it’s kind of fun being a blunt kinda guy…). If you are not sure where the money is leaking out of your wallet, write down all of your expenses for a month, then make your “spending plan” (budget).

3) Cut out the crap! Clean up your budget, for real! I mean, are all those stops at 7-11 everyday really necessary? And if you really think you have to have that Starbucks Mocha Latte every morning, take a look at your backside in the mirror one time—seriously, small things must be sacrificed to get the big things. Consider this: why do you suppose such a large portion of our convenience stores and motels are being bought up by Indians and Arabs? Because they know how to sacrifice! What Americans know is how to spend all kinds of money in convenience stores and on vacations in motels! Stop it! Put that money away to pay down your credit card debts!

4) Do you have more than one credit card? You have to decide which one needs to be paid off first. Ideally, you should pay off the one with the highest interest rate first, but some people are more easily motivated by taking the smaller bites first. If that’s you, start by first paying off your smaller balances. Remember though, that high interest rate isn’t getting any lower, and it’s costing you more everyday… Shhh, what’s that sound? That’s the sound of money leaking out of your wallet from that high interest rate your paying…

5) Speaking of high interest rates, a study done by the Massachusetts Public Interest Group shows that 56% of credit card customers are successful in getting there interest rates reduced by simply calling the credit card company or bank and asking. It may take a little whining, cajoling, or talking to the supervisor, but it can be done in many cases.

6) Pay the minimum payment each month on all your debts except your number one priority from step 5. Put all that “extra” money you found in Steps 2 & 3 towards that top priority debt. Under no circumstances make only the minimum payment toward your designated priority debt, or you will not get it paid off in this or your grandchildren’s lifetime. Diligently use all that “extra” money for this debt.

7) Shampoo, Rinse, Repeat. As soon as you get one card paid off, repeat the process on the next one. At this point, you should be getting pretty good at it. Keep going until all your debts are paid in full.

This isn’t quantum physics, folks. It’s easier than you may think, but you have to get real! Be creative! Sacrifice the small things… bigger things are on the horizon—

jdBoone is a web consultant, marketing strategerist, grant writer and all-round white hat guy for The Center of Hope, Inc. alternative rehabilitation program in Clearwater, Florida. His latest launch can be found at http://www.witnesswear4christ.com