Credit card debt is a problem
that is faced by a lot of individuals today. Some people say that our world was
probably unable to understand the concept of credit cards altogether due to the
pace at which it leapt at us. Well, sometimes even small concepts can be
misunderstood too. You can’t blame people for mistaking credit cards as lottery
money (or a new found treasure).
Anyway, the question here is how to get rid of
credit card debt and not how
you got into it.
The first thing here would be to prevent the
situation from getting worse i.e. control your expenditures so as to prevent
yourself from putting on more debt. Already, the applied APR is making your debt
grow and you would surely not want to aggravate the situation. Moreover,
controlling your expenditures will help you in developing good spending habits
too which will become handy even after you have wiped off your debt. Using cash
sometimes, instead of credit card is one way of exercising restraint. Not
getting carried away with the various sale offers is another important way of
controlling your debt situation and preventing it from getting worse. Another
rule is - Do not use more than 70% of your credit limit at any time. In fact,
try to keep it a very bare minimum until you have the things in control.
Debt consolidation is a good option
too. It involves transfer of balance from one or more credit cards to another
credit card (which has a lower APR and more benefits). However, do not treat the
new credit card as another source of free money. Also, it’s prudent to compare
various balance transfer offers available in the market and read their fine
print, before making your selection. Another option could be to check with your
current credit card company and see if they themselves can offer you a lower APR
and hence save the hassle of moving to a new credit card. It does work at
sometimes.
If you can, then try and pay off some of your
credit card debt. It will not only reduce your overall debt as such but also
reduce the APR burden on you. You could even look at closing some of your credit
card accounts especially those on which the annual fee and the APR is more.
Also, do not apply for new credit cards just
because you have more or less exhausted your credit limit on your current credit card(s). This is a perfect recipe for disaster. Moreover, if you are in such a
bad situation then it is very likely that your credit card application might not
be approved in the first instance. Besides credit cards, refrain from other
kinds of borrowings too e.g. loans etc. You would not want to switch from one
type of debt to another, would you?
Always
remember that most of your purchases can wait for later. There is nothing like
the peace of mind that you earn from clearing away your credit card debt
(any debt for that matter).
