The credit card crunch has every American cardholder scratching their heads on how to keep their finances afloat, especially in this bad economic times.
The problem of credit card debt has ballooned ever since the economic downturn first began. Credit card companies, getting burdened by huge profit losses, are trying to bail out themselves by passing it down to their customers. The result: high interest rates and astronomical fees. Clearly, if you have any type of credit card debt now, you need to get out of it as soon as you can.
There are a lot of ways you can get rid of your credit card debt. If you are really in deep, you can seek the help of credit counselors. They can help formulate a financial plan for you which, at the very least can stabilize your finances by lowering your monthly payments while making only a minimal sacrifice on your debt interests. However, if your credit card debt is still at manageable levels, you can try and do it yourself. You just have to keep in mind that getting over your credit card debt needs only some self-discipline and a lot of creative thinking.
Creative thinking means that you approach the problem of credit card debt at different angles, figuring out where you can make changes, even just small ones, to get credit card debt out of your life. To be able to do this, you have to have at least some understanding of your credit card bill. If there is one thing that you must remember, it is this: keep an eye on your interest rates.
Your interest rates dictate how much your bill is going to be at the end of the month. You should also read up on what the penalties will be if you miss one monthly payment. These days, its bound to be astronomical. Finally, be wary of the “minimum amount due”. This does not go to pay off your debt, only the interest.
It would also be great if you understand your credit card habits as well. For instance, if you are something of an impulse buyer, keep your credit cards out of your pocket and, maybe keep it in your desk at home. The convenience of purchasing via plastic has sunk many a cardholder into debt because of impulse buying.
When paying off your debts, if you have many, try to avoid your “extras”. “Extras” meaning the money you have left over after paying off a debt. Instead of using it for purchases, use it to pay off another debt instead. Keep doing this until your debts are paid and you will be pleasantly surprised of the results, and of the “extras” that you will have available once your debts are gone.