How to Master Your Credit Card Debt
A Credit Article Contributed by Mark Mcclelland
Don't Let Your Your Credit Card Debt Become Your Master
It's becoming increasingly likely that, as more and more of your purchases are made with a credit card, the debt you'll incur will come to master your financial life. Primarily that's because many of your day-today are actually impossible without a credit card - like making purchases on line.
There are really two basic types of card users: those that pay off their credit card balances every month and those that don't. And in all probability you're in the latter group. If so, you're a prime candidate for letting that debt become the master of your every financial move. How much credit do you think you can get if you start missing your monthly credit card payments because your debt load it too high?
How to Master Your Credit Card Debt (Do These Things)
To avoid having the debt monster become the master of your life, you need to master a few things yourself:
First and foremost, gather up all your cards and sort them in terms of their annual APR, with the lowest rate on top and the highest on the bottom. Then go get your scissors and cut up the bottom half. Unfortunately this doesn't mean you don't have to pay off the balances for those cards you just cut up (don't we wish it were so easy), but at least you're no longer paying the pig. If possible eliminate all but the lowest rate card.
Getting rid of cards also helps reduce the temptation to go on a spending sprees after you get depressed whenever you think about the humongous amounts of money you're paying for the privilege of living above your means.
Next, always dig deeeeep and make the largest monthly payment possible. If you can, pay off your balances every month. If you can't, and the purchases on your cards were not for true emergencies, it's a sure sign that you're living a lifestyle you can't afford.
Keep track of your credit limit. In order to entice you to use your card, the card issuers will raise your credit limit as you pay off your balance. Don't be tempted by this ploy. Be supremely gratified by the fact that they're actually trying to lure you back into using your card; you're becoming the master of your own financial future, taking control away from them, and they really hate that.
And finally, keep at it until you've forced the debt monster back into it's cage. Becoming the master of your own fate is no easy matter. Everyone wants a piece of you, their pound of flesh as it were - don't let it happen.
Pitfalls to Avoid to Master Your Credit Card Debt (Don't Do These Things)
There are a few sure ways to dig yourself in deeper than ever.
They first is to make late payments, miss payments, or default on them altogether. Late and missed payments are gong to show up on your credit report as big fat negative notes. Defaults may lead the issuer to seek legal remedy, and could force you into bankruptcy.
Next, never, never, never exceed your credit limit. The card issuers are not as understanding as youy'd like to think, and they'll slap you up side the head with penalties and fees sop large it'll make your ears pop.
Don't fall prey to great sounding introductory rates. If you'd actually take the time to sit down and read the fine print you'll probably discover that that introductory rate was indeed a tease - you didn't think the called them 'teaser rates' for nothing did you? It's likely that after the teaser rate expires, your annual PAR will just about double, and if you maxed out the card before then, it could take years to pay it off the balance - even if you stopped using the card at that point in time.
And finally, try to avoid "reward cards". You do know, don't you, that nothing is for free. Do you really think that the card issuers are really just giving you that "free" vacation, or giving you back "free" money? take a look at the interest rates they charge on those reward cards... they're at least several points above the rates for their more traditional - non-reward - cards. You can be sure that the card issuers aren't loosing a penny by showering you with the lure of points, miles, vacations, cash-back or anything else.
