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Stop Swimming in Credit card debt


As of 2005, the Americans have incurred over $735 billion in credit card debt. Why the large number? It’s because credit card debt accumulates easily. Credit card debt happens when a client uses his credit card to purchase an item. For every month that the client fails to meet the required payment, late fees and penalties are charged. Also, as long as the debt remains unsettled, the interest gradually increases the amount of the debt. This is how credit card debt accumulates.

People keep on swiping their credit cards even though they still have outstanding payments. Before they know it, they would max out the credit card and they would find that they are thousands of dollars in debt. In order to afford the things they want, they will get a new credit card. The same cycle may happen and that’s when people start drowning in debt.

However, we should be clear in saying that credit cards are NOT bad. In fact, these shiny plastic cards provide convenience to the consumer. For example, credit cards can help pay for emergency expenses like when you have a sudden car repair or when you have to make an emergency flight back home and you have no cash for a ticket. While you may not have cash yet, credit cards can help you accomplish the things you have to do. Another good thing is that credit card companies do keep comprehensive records of your financial activities so you always have a document to refer to. Credit cards are also a good way of paying for certain necessities while you wait for your monthly paycheck to arrive.

However, the very convenience of credit cards can cause a lot of abuse. The important thing to remember is that once you realize that you can no longer meet the payments of your credit cards, you can approach the credit card company and ask for negotiations regarding your payment procedures.

There are a lot of other things you can do to get out of credit card debt. Here are some of the steps you can take.

The first step in getting out of credit card debt is to stop using that credit card altogether. If you have a lot of credit cards, assign one card as an emergency card and make a commitment to use it only for that purpose – for emergencies. You can cut the rest of the credit cards or put them in bags in the freezer.

Analyze all your credit cards and see which ones have the highest interest rates. Prioritize those with higher interest rates. If you postpone payments on these cards, the interest will make your debt balloon. Pay more than the minimum. If you really want to eliminate debt, make the commitment to pay as much as you can on the cards. This way, you can eliminate the debt faster and you don’t risk penalties.

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