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Beat the Credit Card Blues: 5 Super Strategies to Break Dangerous Spending Habits
By Stanley Kershman
Many U.S. consumers continue to struggle to get out from under credit card debt. In fact, the average American carries almost $2,500 in credit debt each and every month. These financial consequences can be critical, and long lasting – leading to shaky credit ratings and even bankruptcy.
It's easy to see how this could happen. A consumer who makes only the minimum payment of $50 a month on a $2,500 credit card bill (at the average 16-percent interest) is paying off a mere $10 of principal. There's another $40 being added in interest EVERY MONTH. After a year of paying minimums, they'll still owe $2,380. Now imagine if the credit bill is $15,000 or more...that's definitely a danger zone.
Want to do things differently? Want to put your Debt on a Diet? Try these five super strategies and break your dangerous spending habits today:
1. Step away from the counter.
Give yourself a time-out when you feel the temptation to make a purchase. For an item over $100, put it on hold, and leave the store. Let the idea sit for 24 hours, and then ask yourself whether you really need the item: the answer is likely "no." For clothing and other purchases, put the item on the 10-minute hold rack. Walk away, get a drink or a snack and decide if you really need it or just impulsively like it.
2. Set goals.
Decide how quickly you want to reduce your debt, and how much you can afford to pay down each month - but don't stop there. Set financial goals that involve "positive" incentives, too, such as savings and vacations.
3. Start canceling cards.
How many credit cards do you really need? Most people need at least one to handle payments that can't be made easily any other way - and you may need two, depending on where you usually shop or travel and which card is accepted.
4. Lower your limits.
Save yourself the grief of overspending and not being able to afford it. Most people don't know that you don't have to accept the maximum credit limit that your issuer is willing to provide. Choose the limit that you're comfortable with, and tell your credit card issuer - in writing - that you don't want any automatic increases. That way, you stay within your budget.
5. Consolidate.
If you're carrying a balance on several cards, look for a financial institution and apply for a consolidation loan. This loan, at a competitive lower rate of interest, will allow you to make one convenient monthly payment that is far less than the ones on your various cards, and will give you a fresh start.
These five strategies will get you started on the road to credit card recovery, but there are plenty more tricks to keep you going. The first step, however, is simply to recognize your dependence on credit cards, and to start making small changes in your lifestyle to reduce that dependence. Just like interest charges, those small changes will add up but this time, in a positive way!
About the Author
Stanley Kershman, a.k.a. the Debt Doctor, is a leading authority on solving financial disasters. Consumers, you can now defeat your debt problems by downloading your FREE COPY of Stanley's Handy Budgeting Worksheets. And don't forget to check out "Put Your Debt on a Diet: A Step by Step Guide to Financial Fitness" available at www.amazon.com and www.debtonadiet.com
Article Source: http://www.simplysearch4it.com/article/23655.html
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