Thursday, January 10, 2008

Advice For Taking Care Of Your Credit Card Bills

By Robert Bain

Too much credit card debt is a problem for a large percentage of households. It is important that you do all you can to reduce the amount of debt you have accumulated on them. Making minimum payments isn't enough because it is going to take you years to pay off those charges. In the mean time you have less disposable income each month for your expenses and to put into savings.

The spending habits of most people in society aren't the best and there is always room for improvement. Paying off your credit card bills doesn't mean you can't afford to eat or to have fun. It does mean that you will need to make changes to when you pull out the plastic though. The sacrifices you make now to pay them off will really be worth it when you look at the big picture.

Write down all of your expenses and all of your income. You should immediately start to see places where you can cut expenses. Instead of buying lunch out each day make it at home. Instead of paying $2.50 a day for coffee on the way to work make your own and take it in a thermos. These little savings can add up to hundreds of dollars each month that you can apply to your credit card bills.

Sometimes transferring balances can be a good idea to help lower your interest rates on credit cards. You need to be careful with this though and look at all of the guidelines. You may think you have found a terrific deal as the interest rate on the transfer is 0% or very low. However, it is likely only for a set amount of time and if you don't pay the balance in full by then it will be more than what it was initially.

Stick with it though as you will soon see the benefits of this type of payment. Immediately take the money you were paying for the highest interest rate and apply it to the next one. Keep on doing this until you have paid all of them off in full. You should make yourself a promise not to charge anything new during this process as well. It can be tempting, especially when you have paid one of them off.

Sometimes a credit balance transfer of balances can help you save money as well. It really depends on all the details of the offer. Never agree to it unless you have read and you understand all of the terms. Little things in there can make a huge difference on your account. For example the low rate may only apply for six months. If you can't be sure you can pay it off in that amount of time then don't do it because it can end up costing you more in the end.

Once you have paid off all of those credit cards you can start putting that money into a savings account. It is fine to splurge once in a while to buy something you really want or to take a trip. The goal is to keep some money in savings for emergencies so you don't have to rely on your credit cards. Put them away and don't use them unless you absolutely have to.

Eliminating credit card debt isn't going to be easy but it can be done. Your entire family can take pride in their efforts to make it happen. Too many parents hide these types of issues from children. However, these are the types of lessons that they can benefit from in their own lives as well so let them be a part of it.

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