Credit Card Debt is Unnecessary

There are so many people out there who are drowning in credit card debt.  They get a credit card and treat it like it’s a license to spend.  Oh my! I have money now!  This really isn’t a credit card problem, it’s a behavior problem.  But credit card companies play on that emotion to urge you to use your credit card more.  That’s how they make their money—from the interest and fees they receive when you run out of paycheck before you run out of credit card bills.

If you are in a credit card debt situation, you must stop spending on your card.  The best way to do this is to create a budget.  Most people don’t create a budget because they are intimidating.  Dave Ramsey’s advice on credit card debt is to sell a bunch of stuff in a rummage sale, take an extra job, or anything else that will bring in extra income, pay off the credit card, then never use it again.  To Dave, “Cash is King,” use a debit card.

To get started with your budget, write down everything you spend for the next two weeks so you can get a handle on exactly where your money is going.  Then your budget will be much more accurate and you can prioritize your expenditures, weeding out the things you don’t really need.  That money can go toward your credit card bill.

If earning extra income doesn’t work for you for some reason, or you are having difficulty paying all of your bills every month, contact the credit card companies and other creditors and explain your hardship.  Try to negotiate lower monthly payments.  If you do this for your secured debt, you could end up with more money to pay off the credit card.  Once paid off, that money could go back to your secured debt payments.  Just a thought.

You may feel a real urgency to pay off debt that you owe if you are getting calls from creditors and collections agencies.  Don’t let them bully you.  There are fair market practices that they have to follow. They are not allowed to lie to you or call you before 8:00 am or after 9:00 pm.  They must honor a written request from you requesting them to stop calling you.

If you are unable to manage your finances on your own, consider credit counseling.  There are reputable services out there, but there are many that are not so.  Be careful in vetting these agencies, and look for unadvertised fees that may add more debt.  Ask your bank for a recommendation if you are unsure.  Family and friends may know of reputable agencies as well.

There are more types of debt management, including bankruptcy and debt settlement programs.  But these are risky endeavors, and will probably have a negative effect on your credit rating.  Especially with debt settlement programs, let the buyer beware.