Many people are losing sleep these days due to excessive credit card debt. Too many people are spending money that they don’t have and now they don’t know how they are going to pay for their indulgences.
People run up excessive credit card debt because they don’t use their credit cards wisely. They buy too many things that they think they “need”. Instead of waiting until they have the money for this so-called “need”, they use other people’s money (which is what anyone does whenever they use a credit card) but then find that they cannot pay the debt plus the interest.
The other great problem with the usage of credit cards is the carrying over of the balance by paying just the minimum balance each month. When you as a credit card holder fail to pay more than this minimum balance, the interest on the unpaid debt just keeps mounting and mounting. At standard credit card interest rates, if you had a balance of $1,000 in principal and only (but always) paid the minimum balance each month, it would take you 30 years to pay off the balance. The amount of interest you would pay in that time is relatively astronomical.
Even if you have massive credit card debt that has built up, you can stop losing sleep over it. This doesn’t mean that you will magically erase your credit card debt overnight. You will still have to be responsible for it. But you will be amazed at the power of action.
As soon as you start taking the right action to get control of your credit card debt and the use of your credit cards, you will start sleeping better again, knowing that you are now on the right path to getting out from under the crushing debts and understanding that you are creating a brighter financial future for yourself.
When you feel in control of the situation, you become able to relax and focus and solve the problem in time. In the knowing that you are well on your way to solving the problem, worries ease and sleep becomes easier again.
What You Can Do to Get Control of the Credit Cards
You must be the master of the credit cards. They can no longer master you. There are definite steps that you can take to start down this path to mastery. What you want to do is find out those things that you really have no business charging on your credit cards unless it’s an absolute emergency. Let’s look at some of these.
Food – What would you ever charge food? Food is some of the least expensive stuff you can buy compared to your other expenses. When you charge for food and then carry the balance by paying the minimum you are just jacking up the real price of your food. Furthermore, you are apt to over-spend on more expensive food items that you don’t even need because you tell yourself “I’m charging it so I can afford it”. Never buy food on a credit card unless it’s a drop-dead emergency. Pay off the balance the very next month. Outside of some emergency situation, never buy food that you can’t pay for with cash or with your debit card.
Gasoline – This is one necessary product that people constantly charge that they never should charge under normal circumstances. Again, all you’re doing is driving up the real price of your gasoline, and gas is something that you should pay as little for as you possibly can because you need so much of it. You don’t want to charge something that is going to be burned up before you even pay for it, do you? As with food, always pay cash for gas except under emergency circumstances. If you ever do charge for gas, pay off the balance in full the next month.
Clothing – This is another basic item that you should not charge. It’s understandable if it’s Christmas time and you are buying high-end clothes as gifts. But otherwise, when buying your clothes or those for your children, never charge them. Especially in the case of your children, they will be growing out of those clothes fast enough that it’s not worth your time charging their clothes anyway.
Utility bills – No, don’t put your automated payments on your credit card. Put them on your debit card. It’s all too easy to fall into the trap of doing automated bill payments on a credit card, but once again you then fall into the trap of paying interest on top of the actual bills.
Other automated bills
– More and more, we can have automatic bill pay set up. This is convenient, it saves paper, and it actually cuts down on costs for companies, and they can pass on those savings to consumers. Unfortunately, once again, it’s all too easy to set up automatic bill pay on a credit card. You must use a debit card for these things. By having your credit card billed you just continue to mire yourself in debt because of interest payments and because it’s too easy not to pay more than the minimum balance each month.
Start taking these steps to get your credit card balances under control. If you are quite deep in credit card debt, call up your credit card providers, explain your situation, and see if they’ll work with you to accept lower monthly minimum payments while you get your act together.
You can also see about transferring balances to new credit cards that have lower interest rates. Credit card providers will often lower their interest rates for you if they think that you may be leaving them. And if all else fails, you can always get together with a debt management company. The point is, there are solutions. Stop losing sleep over your credit card debt and start taking action.
About: Hasic M is the editor of Think Credit Cards where he shares his tips on how to find a credit card that you will be satisfied with plus provides you with useful tips on credit card debt elimination.