Paying Off Credit Cards
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by: barrywaters
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Word Count: 549
2008 was a rocky financial year for most everyone in this country. Many were at a loss for what to make of their economic futures. As consumers look to 2009, many are trying to regroup and figure out a plan for their financial futures. Some have spent within their means and will be able to recover. Others are planning to pay off debt and simplify their spending habits. It is estimated that the average number of credit cards per consumer in this country is four. Credit cards are a common way of making purchases. If utilized appropriately, they are a handy resource. But credit cards can also offer an opportunity to overspend. Once debt is accumulated, it takes a disciplined routine to climb out of it.
The first step to reducing and eliminating debt on your credit cards is to stop making purchases on the cards. It seems obvious, but it is extremely difficult to pay down debt when you are accumulating more. Do not open accounts for new credit cards when you stop using the current ones either. Alter your spending behavior. Write checks, use cash or a bank card that automatically takes the amount from your account. Next, examine your budget to determine where you might be able to cut expenses. The most logical area of your budget in which to do this is discretionary items. Stop eating out, going to the salon, paying to have your car washed and purchasing entertainment items you do not need. Use those funds instead to make payments on your credit cards to reduce the balances. If you cannot cut your budget any more, you may look into picking up additional work or selling unnecessary big ticket items (like downgrading to a less expensive car).
After you have a handle on your budget, develop a routine of slowly paying down the debt on your credit cards. Always pay more than the required monthly minimum on your balances. When you make only the minimum payment, you are paying a significant amount of interest. If you pay more than the minimum, you will pay down more of the balance. Work on the card with the least amount of debt first, if you have debt on several credit cards. The emotional benefit of seeing some debt paid off will offer a reward and let you see the light at the end of the tunnel. Send in additional payments on your credit cards, if you ever have free funds. After you begin to eliminate the debt on your credit cards, cancel the most recent cards and keep the one you have had the longest. A card that has a long and solid history with you will help your credit score. Maintain your commitment to paying off your debt until the balances on all your credit cards have been paid. Always remind yourself of the dedication it took to pay down accrued debt, especially if and when you decide to use a card regularly again. Pay off your balances in full and view your card like you would a check or cash. Remember that you will have to pay for everything you put on your credit cards. See More Credit card applications ...
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