In our consumer driven, ad-heavy culture, it can be very difficult to keep spending under control. Modern marketing is designed to make a person feel inadequate unless they have certain designer items, drive a new car or otherwise conform to the "hip" culture that pervades our media. Add to this the seductive ease of spending that credit cards provide and even the most stout and amongst us can find themselves in severe credit card debt. If this is you, how do you escape?
First, acknowledge that you are human and have made a mistake. Forgive yourself. Do not beat yourself up over the situation but do make a promise to fix the current situation to never find yourself in this credit card debt again.
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Second, stop spending. Cut up your credit cards or at minimum quit carrying them around with you. If they are not on your person, it is impossible to make quick impulse purchases. These quick little purchases add up to a lot of money over time. Instead, pay cash for everything. Psychologically you are less likely to spend if you are handing over cash instead of a plastic card. Casinos understand this which is why bets are done with chips instead of cash. In this way, you gamble longer as each loss is not as psychologically meaningful. By using chips the casino has the ability to a take even more of your money.
Third, sit down an figure out what you really need and only spend money on these items. This might entail curtailing your social life. For instance, spending $30 at the bar once or twice per week does not sound like much but figure out what it is costing annually. In this case, that cost is about $2,340 per year. Plus these are after tax dollars so you need to make about $3,000 per year to support your bar habit. If you make $30,000 dollars a year this is 10% of your salary! Can you really afford that?
Fourth, transfer high balance cards to lower balance cards. Next, contact each credit card provider and ask for an interest rate reduction. Many times it will be lowered on the spot.
Fifth, check the current balance on each of your credit cards. Pay the minimum each month on all but the smallest balance card. On the smallest balance card, pay as much as you can every single month above the minimum. Keep doing this until the card is paid off. On the card with the second lowest balance, pay the minimum plus the minimum you were paying on the first card. Then pay as much as you can beyond these two amounts. Once the second card is paid off, pay the minimum from the first and second card on the third card plus as much as possible beyond that. Repeat for all of your credit cards. This process is called "snowballing" and your ability to pay off debt increases as your debt load decreases. That is something to get excited about!
Hopefully, focusing like a laser on curtailing spending and paying down your credit cards will get you out of debt in a few years. However, if you are in too deep and the methods outlined are not working, you might need to declare bankruptcy and get a fresh financial start. Bankruptcy is preferable to years and years of financial suffering. Contact a bankruptcy attorney and he or she can advise you based on your particular situation.
Take action now and help yourself in the long run. Credit card debt is a financial cancer and the sooner you address it the better!
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