The economy has been tough on many families and individuals alike, and many have been forced to rely on credit cards simply to afford basic necessities each month. However, credit cards aren't limitless and they require monthly payments, and when money is tight many people overcharge their credit cards and aren't able to make the monthly payments. When monthly payments aren't made, collectors start to call, and credit scores start to fall. Instead of throwing up your hands and choosing to declare bankruptcy, take charge of your debt by choosing to properly manage it with one or a few of the following options:
Sign Up for Credit Counseling
If you truly feel that you are unable to manage your multiple monthly credit card payments by yourself, consider signing up with a credit counseling service. Credit counseling organizations are able to consolidate your debt in to one monthly payment which is usually smaller than the monthly payments you are already making, and are usually able to reduce the amount of debt you owe overall.
Restructure Your Monthly Budget
Frivolous spending is one of the top reasons for excessive debt. Many individuals don't even realize how much money they are spending monthly on small purchases such as coffee or fast food. If you want to pay off your credit card debt while still being able to afford monthly expenses, you will need to completely redo your monthly budget. Review previous bank statements and look for areas in which you can reduce spending. Instead of spending $50 on coffees and cheeseburgers, put that money towards your credit card debt.
Stop Charging Your Cards
This step seems too easy, but many people struggle with not using their credit cards once they choose to pay them off. They have become so used to their credit cards supplementing their regular budgets that they don't know how to survive without them. When you decide to pay off your debt and don't believe you are able to stop using them, hand them over to a trustworthy friend or simply cut them up. Do whatever you have to do to prevent yourself from continuing to use them.
Start Small
This may sound counterintuitive as you are paying more interest on the larger amounts owed; however, by paying off your smallest card amounts first you are better setting your self up for success. With each card you pay off, you will feel as though you are achieving something and be more inclined to pay off your other cards.
Pay With Extra Funds
Did you receive a large check from your favorite uncle for your birthday? Or make more than expected during your garage sale? Put that extra money immediately towards your credit card debt. Don't allow yourself the chance to get big eyes and blow your new wad of cash on a new TV or new outfit. Use it to pay off your credit card debt as this will actually enhance the quality of your life in the long run.
Stop charging your cards says it all… going to a cash only life can help people more than they realize.
It is important to differentiate people in the extreme above than people with a good track record. I use my card for everything but pay it off in full every pay day.