Posted on November 6, 2007 at 2:31 pm Stay Out of Credit Card Debt Although most people agree with me on this, many people find themselves falling into credit card debt and facing large monthly debt bills. In fact, credit card debt negatively affects a lot of people?s long-term wealth and it is very important that you get out of debt. In our opinion, the real problems with credit card debt are the following: By purchasing goods before you have earned them, you are in effect borrowing from the future to pay for the present. In essence, it?s the exact opposite of saving or investing and instead of earning money you are paying interest. Interest rates on credit cards are typically much higher than savings rates and even higher than many alternative investments (like stocks, bonds or CDs). By carrying big balances on credit cards many people feel that it is hopeless to try to pay them off, so their balances continue to rise. Remember that every bit you pay down makes it easier to pay the rest down. Once you get into credit card debt you fall further and further behind because in addition to funding current expenditures, you also need to pay for the previous expenditures that are already on your credit card. If you are already in credit card debt, don?t worry. Follow these rules to get out of debt, and be patient: Never forget that even paying down a small portion helps. The more you pay down, the easier it is to pay the rest because there is less interest due each month. ALWAYS pay more each month on your credit card than what you spend on your credit card. If possible, discontinue using your credit card and start paying for your purchases in cash, and only when you have the money. Don?t lose site of the big picture. It?s often discouraging because it seems like it will take forever to get out of credit card debt. Don?t get discouraged. Think about how nice it will be to start sending those credit card payments to your savings or brokerage account each month when you're out of credit card debt. If your credit card rates are high, try calling your lender and asking them to reduce the rate. You?d be surprised. I?ve heard of companies reducing their rates from as much as 18% to as low as 7-9%. Not sure if your credit card is a good deal? Click here to learn about credit cards that offer lower interest rates or other offers that you may not be getting now. Sometimes it pays to transfer balances on your credit cards to lower interest rate credit cards. This is usually a good idea but be careful for two reasons: 1) these low balance transfers often expire in a few months at which point the interest rate may be even higher than your previous rate, 2) new purchases made on these cards will carry the standard interest rate (which is much higher than the balance transfer rate). As you make payments, they will be applied to the low balance transfer portion first. If you find yourself with more payments than you can handle, you may want to refinance your debt with a lower interest rate loan. Sometimes these loans can cut your interest rate in half or more, especially if they can be backed by your assets (car, home, boat, etc.). [url="http://www.legalsurf.net"]Click here to learn more about getting a home equity or other type of loan.[/url] If you have trouble getting a low interest rate loan, it may be advantageous to consolidate all of your loans into one payment or to work with a debt consolidation company to lower both your debt and your debt payments.

Posted on November 6, 2007 at 2:31 pm I learned my lesson with credit cards. Right now I always pay in cash. I only use credit cards in case of emergency like running out of cash on a holiday in another place.

Posted on November 6, 2007 at 2:31 pm [QUOTE=kittykittylala;1246]Now I've learned my lesson. If any of my friends would like to get a credit card I do discourage them and state a very strong reason for them not to get credit card.[/QUOTE] I do think it is a good idea to have at least one credit card. I think you could tell them to just be cautious when using it. Set limits on how much they should spend. If they learn how to discipline themselves they should be ok.

Posted on November 6, 2007 at 2:31 pm [QUOTE=kittykittylala;1246]Now I've learned my lesson. If any of my friends would like to get a credit card I do discourage them and state a very strong reason for them not to get credit card.[/QUOTE] it's not the credit card, it's the person using it. They can be a helpful tool of you have discipline.

Posted on November 6, 2007 at 2:31 pm If it's something that you want to buy, you could save up or put it on layaway. That way you don't have to worry about getting into debt, because once you have the item you don't owe anything.

Posted on November 6, 2007 at 2:31 pm Good idea vicdo2, that's good for when you make a large purchase like furniture. Most of the time they will let you pay on it.

Posted on November 6, 2007 at 2:31 pm One sure way not to get into credit card debt, is not to have credit cards. But now adays it's hard to live without one. Some things require a credit card.

Posted on November 6, 2007 at 2:31 pm As long as you're paying down debt I don't see anything wrong with transferring balances. That'll help you save money while you work the debt down. If you're just shuffling then you're asking for more trouble later on.

Posted on April 2, 2009 at 7:22 am I agree, Most commonly it is the source of debt..

Posted on April 9, 2009 at 9:41 am The idea, planning, preparation, principles and strategies to guide operations