Preventing and Overcoming Credit Card Debt

Written by A Guest Speaker on May 21st, 2008

Preventing and Overcoming Credit Card Debt
Written by Prasad Khose

I was so happy when I got my first credit card. Many friends suggested me, not to take a credit card and I have successfully turned down all bank offers for some time, but somehow one day I failed.

Life was so easy after credit card, new clothes no problem, lot of shopping no problem, diamond ring for wife, sure. Then the day came, I got the credit card statement, it was shocking. I don’t know when I spent this much money only in one month.

This is the story of every credit card holder, some managed to pay their bills & try to keep control on future bills. Unfortunately some people can’t even pay minimum due amount of the bill and there starts credit card debt. It’s very easy to fall in credit card debt and very difficult to get out of it.

I would like to give some suggestions to avoid credit card debt and how to pay off your credit card debt.

1. Use your card sensibly, I know everyone does that, want to do that. However there are times, when we don’t think about credit card statement. Use your card as you are paying by cash or check.

2. Try to pay your monthly bills on time, some credit cards have very high interest amount. It gets quite difficult to pay off the balance with high interest. At least try to pay minimum due amount of the bill.

3. Almost all credit card companies allow to pay using EMI, take the benefit of it. Clear all the pending amount and try not to use card till all amount is paid.

4. Use your savings to pay off, I know it’s hard to do but if you compare the interest rates on savings & credit card, you will come to know why I am suggesting this.

5. Friends and family is there to dig you out of it, make sure you pay them back and don’t loose trust which is really important.

6. Try to negotiate with your credit card company. Let them know your situation, let them know you may have to declare bankruptcy if there is no other way. If they come to know that you want to pay and they might loose all amount because of bankruptcy, they will try to help you. Request for a lower interest rate, lower repayment schedule. This may work and you will be saved.

7. There are some organizations who will help you to repay, like americandebtcontrol, cleardebtsolution, freedomdebtrelief. Google for more. But these organizations have their terms, you can not just go there and say reduce my debt, try to find out more about it.

8. File bankruptcy, not too good suggestion but if situation demands, we can’t help. Remember your credit record will contain this information for 10 years, so before doing this try everything you can do to pay off all amount.

While paying off the bills $50 savings per month also does make difference.

1. Watch movies at home instead of going out.
2. Bring your lunch from home, stop eating out.
3. Use coupons, discounts for groceries.

Remember to use your card sensibly, it will help you to avoid all future financial problem and unnecessary trouble.