The idea of credit has always been around since the dawn of time; of course, there wasn’t a little fancy plastic card to ease the process, but farmers would buy groceries on credit; when their crops came in and sold- they would simply pay their debt.
The idea of having an easy tracking system that allowed consumers to charge first came to light in the mid-twentieth century. Along with the credit card boom came interest rates; high interest rates, at that. People wants became more important than their needs and people began to gather credit cards as means of buying anything and everything they wanted. For many, the credit card was their down-fall.
In today’s economy, credit cards are simply just another added burden on consumers. In order to eliminate the debt that has accumulated over time; you must understand that it will take time to payoff the debt. In order to start the process, you need to say enough and stop using your credit cards. As soon as you cut up your credit cards; you are taking the first step to becoming debt free. Many professionals recommend keeping at least one credit card for emergencies only, however, this card needs to be used only in emergencies.
The second step involves management and budgeting. You must call your credit card companies individually and explain your situation; ask if there are any hardship services offered with their company; many offer lower interest rates for extended periods of time based upon circumstance. For those that wish to take the added time; you may want to check into rolling over the accounts into lower interest credit accounts; most often credit card companies do not charge to have other accounts rolled over to theirs. When you have completed this; simply write down all your credit card accounts, the balances on each, the minimum payment on each, and most importantly the interest rates. All your card minimums must be met each month. Any extra money you have for paying more on an account should be applied to the highest interest card.
Here’s the most important part, once you have a card paid off, continue making that entire payment on the next highest interest card. In other words, don’t blow it every month and think you have extra money; you don’t- not yet anyway. After time you will see your debt shrink and your light at the end of the tunnel.
Credit counseling is a great idea for many whom have trouble budgeting and who don’t have the time to do the leg work to lower interest rates themselves; however, fees may be due to those willing to aid you in this search. Be sure to look for non-profit organizations who are accredited. As well, be sure to read all the fine print prior to signing any documents. Credit counseling can also give you support and advice; you don’t necessarily have to turn over your finances to them. There is great advice and more information on their websites.
On a final note, be sure once you are debt free to never allow this to happen to you again. Credit cards are a great way to buy needs that you cannot afford at present; however, wants can wait and should wait until you have the actual cash in hand.
