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Debt Management and Consumer Counseling Credit Card Debt Management
Many times people will look at a credit card and see only the ease and convenience with which they can painlessly get the things that they want. When asked to list their debts, people will list their mortgage payments, their car payments, and other installment loans, and not list their credit cards.
The fact is that the balance on a credit card is the amount of the debt (NOT THE MINIMUM MONTHLY PAYMENT)...and that debt only increases each time an interest charge or a late charge is added. Paying only the minimum on a credit card balance will mean that it will be many years before that debt is paid off.
It is astounding, but a great many people have no idea what the interest rate that is charged by their credit card companies or whether that interest rate is simple or compound interest. (It's compound...and it is well above the national interest rate.)
Too many households in America carry far too much credit card debt. Seventy-five percent of households, in a recent study of American spending habits, are carrying a substantial amount of credit card debt. (Only 41% of American households have saving accounts.)
Now, don't misunderstand me...I am not knocking credit cards. I have a few of my own and I use them almost every month. Credit cards are practically as essential as an automobile in today's world, and if one does business or shops on the Internet, a credit card is indispensable. I also pay the balance before the credit card companies can charge a penny of interest.
Paying interest means that everything that you buy on a credit card cost you more than it would have cost if you had simply paid cash or written a check for it.
The best rule is to pay as you go. Use your credit cards, but pay balances before interest is added.
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| Debt Management-Getting the Picture Debt Management Experts
People who work as debt management experts go to school for that sort of thing. Many spend four years or more getting college degrees that identify them as experts in the money and debt management fields. And they are experts, there's no doubt about it.
The best of the debt management experts and debt management teachers, however, are those who have learned to manage their personal finances and their personal debts, and then passed that knowledge along to their children.
Those who actually do it are the experts, and they are the ones that we need to learn from to avoid having to visit with a well-educated debt management expert because we have gotten ourselves into financial hot water.
As I look around at expert debt managers (those who successfully manage their own finances) I find that they have many things in common. They don't all do things exactly the same way, of course, but the structure in which they manage their finances is basically the same.
1. They save first. Those people who know how to save very rarely get into financial trouble. Sure, they can. Life can throw some pretty hard curve balls....the loss of a job or a major illness. But unless their financial trouble is caused by an outside force they will not get themselves in debt up to their eyeballs.
2. They live within their means. They do not base their spending upon what their friends have. The neighbors might buy a new car, but that will have no bearing upon whether they do or not.
3. They all have budgets. Not only do they have budgets, but they live within the constraints of that budget. They do not make impulse buys. If asked, they could tell you how much is spent each month on food, shelter, clothing, utilities, and transportation. |
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| Debt Management and Credit Scores Debt Management: Getting the Picture
We all have albums (or shoeboxes) filled with photographs. They collectively make up the story of our lives. Photographs are little moments frozen in time that we can look at and recall whole days, weeks, or months of the good times of our lives.
I say good times because we don't take pictures of the bad times. We all enjoy going through those photographs and revisiting happy times of the past.
If we could take snapshots of our financial lives in the same way that we take snapshots of friends, relatives, and the happy moments in our lives, maybe it would help us to remember financial good times as well. It would be nice to remember what we did that was right so that we could avoid making mistakes today and tomorrow, wouldn't it?
If you could look at a photograph of your checkbook that was taken BCC (Before Credit Cards), you would see a balance that you felt so good about. Maybe it wasn't a really big balance, but it was a balance, nevertheless, and it was there after you had paid every debt that you owed. You had money left over...remember that?
It would be nice to see a picture of your savings account, too.
You can make new memories of positive checking account balances and savings account balances once you get control of your out-of-control debts. The way to do that is to just bite the bullet, so to speak, and seek professional help.
Choose a consumer credit counselor and let him or her help you to get your financial life back on the right track so that you can again experience the good financial times that you once had. There isn't a shortcut, and the trip back may not be painless, but it can be accomplished. |
Related Topics: Debt Management Makes a Comeback,
Debt Management Is a Good Thing, Free Programs for Debt Management
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