Paying Off Credit Cards
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by: barrywaters
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Word Count: 525
2008 was a rocky financial year for most everyone in this country. The decline of the real estate market and the credit crisis left many wondering what to do next. As consumers look to 2009, many are trying to regroup and figure out a plan for their financial futures. Some have spent within their means and will be able to recover. Others are planning to pay off debt and simplify their spending habits. It is estimated that the average number of credit cards per consumer in this country is four. Credit cards are a common way of making purchases. If utilized appropriately, they are a handy resource. On the other hand, credit cards offer an enticing path to spend beyond your means. It takes commitment to pay debt off, once it is accrued.
The first step to reducing and eliminating debt on your credit cards is to stop making purchases on the cards. It seems obvious, but it is extremely difficult to pay down debt when you are accumulating more. Do not open accounts for new credit cards when you stop using the current ones either. Simply change your habits. Start using your check book, debit card or paying with cash. Next, examine your budget to determine where you might be able to cut expenses. The most logical area of your budget in which to do this is discretionary items. Start taking your lunch to work, making your own coffee and get rid of unnecessary entertainment expenses. Use those funds instead to make payments on your credit cards to reduce the balances. You may need to temporarily take on additional income opportunities, if you find that you have no discretionary expenses to reduce.
After you have a handle on your budget, develop a routine of slowly paying down the debt on your credit cards. Make more than the minimum payments on the monthly statements. When you make only the minimum payment, you are paying a significant amount of interest. You will actually start chipping away at the balance, when you make more than the minimum payments. Work on the card with the least amount of debt first, if you have debt on several credit cards. The emotional benefit of seeing some debt paid off will offer a reward and let you see the light at the end of the tunnel. Send in additional payments on your credit cards, if you ever have free funds. After you begin to eliminate the debt on your credit cards, cancel the most recent cards and keep the one you have had the longest. Having long established credit card accounts that are in good standing reflects positively on your credit score and credit report. Keep up this routine until all your credit cards are paid off. If you start using your cards again, remember how hard it was to pay off debt. Pay off your balances in full and view your card like you would a check or cash. You are responsible for every purchase you make on your credit cards. Related Topics Secured credit cards .
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