By Evan Vitale
Our series on getting out of debt continues today by taking a look at credit card debt.
As we know, it’s very easy to use plastic; buy things we don’t really need and run up a credit card bill. While it feels good to “shop until you drop,” it certainly doesn’t feel good when the statement comes in each month.
Paying the minimum amount is only a temporary fix. Over time, the interest on your debt will bury you and, perhaps, you won’t be able to use your card again. Therefore, here are some steps on how to get your credit card spending under control:
- The biggest step in getting your credit card debt under control is to stop using your credit card. Stop. Stop. Stop. A good rule to follow while you pay down your debt is to only use cash (or a debit card). In order words, if you can’t pay cash, then don’t buy it.
- If your debt is serious – and a spending problem exists – cut your credit card(s) in half. This will definitely keep you from using them.
- Create a spreadsheet and record your credit card accounts; how much you owe and how much you pay on each one each month.
- Compare your numbers with your other living expenses: mortgage or rent; food; utilities, etc. You’ll be able to make quicker progress on reducing your credit card debt if you create a strict budget. That way, you’ll have a better handle on income and expenses and how much money is available to pay down your credit card debt quicker.
- If your numbers don’t match up and you can’t pay more than the monthly minimum payment on each credit card, then you’ll eventually be in the red each month. The interest on those cards will continue to mount.
Next week, we’ll take a look at some options and theories on reducing and paying off credit card debt.