New Credit Card Offers Save You from Credit Card Debt Habits

08/16/2007
Bad Credit History

Being in debt appears to be a common experience for our consumer society. Over the last decade especially, we have wracked up an enormous amount of credit card debt. We seem to be embracing the idea that instant gratification is the best way to go. If we want something we just charge it on our plastic and worry about how to pay for it later.

This is a dangerous way to handle our finances. We often risk not having credit available to us when a real emergency comes along because we have frivolously shopped on credit and now have no room left on our credit cards. We get into heavy debt easily and it can be a long arduous road getting back out of debt.

Getting out of credit card debt can be a painful process but it is a necessary one to our future financial stability. We must begin to take responsibility for our bad habits and take the steps necessary to rebuild the integrity of our finances.

There are some basic steps that you can take to begin to work your way back out of credit card debt.

1. Assess your debt load. Get out all your credit card statements and make a list of what you owe on each card. This can be a very uncomfortable exercise, but you must be very clear on what kind of financial crisis you are in. Only when you are dealing with cold hard facts can you make a real commitment to bettering your financial situation. While you have all your statements out, make note of what the interest rate is one each of these cards as well.

2. If you have any cards that are already charged to their limit, simply cut them up. You need to pay this debt down and if you keep charging it back up to the limit every time you make a payment on it, you will never be able to eliminate this one.

3. Stop spending. Pay your necessary bills only. Absolutely do not spend on anything else. Shopping is OUT. You may find you are going through some withdrawal symptoms at this point and that is okay. You CAN do this. You can find some fantastic support groups online where you can discuss some healthy behaviour to replace your out of control spending habits. Find more rewarding activities than simply shopping. When you itch to shop, go for a walk, clean the house or volunteer at the food bank instead.

4. Determine if the balances of any of your high interest credit cards can be transferred to a lower interest rate card. Doing this will lessen the amount of finance charges you are adding to your debt each month. If you have three credit cards that are charging you 18% interest and a card that charges only 11%, it is worth it to transfer if you can. If you are unable to transfer to a card you already have, you should investigate low interest cards or credit cards that offer low introductory rates on balance transfers. Once you transfer your old cards it is imperative that you destroy them and close the account.

5. Consider a consolidation loan. This type of loan will pay off all the debts on your current credit cards and give you one new loan. You will then only make one loan payment each month. If you decide to go with a consolidation loan, it is vitally important that you destroy your existing credit cards and contact the financial institutions that issued them to have them close the account entirely. You should keep only ONE credit card for dire emergencies only. If you do not believe you can keep one card without using it frivolously, you must not keep it at all.

Getting out of credit card debt is a huge undertaking. It is also one that is well worth the effort. Carrying this kind of debt takes you further and further away from any real financial security in your life each year that you continue the way you are.

Once you get out from under the crushing load of credit card debt you can begin to think about financing some very important things in your life. Savings for emergencies, education and retirement are all within your reach once you have kicked the credit card habit.

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