If you are like the tens of millions of Americans, who have racked up large credit card debt since the economy took a dive, you may be wondering how to dig yourself out of the abyss of hopelessness.
Many financial experts advise against debt consolidation unless you can find a very low interest rate. Instead, their method of choice is to systematically and aggressively pay down the accounts beginning with the ones that have the highest interest rates.
Regardless of what method you employ, financial experts warn that you will never truly be debt free unless you analyze your spending practices. For example, if you are an impulse buyer–or someone who whips out a credit card to purchase items you don’t have the money for– then no amount of budgeting will help you. In this case, you must first learn how to curb your reckless spending before you can make a real commitment to paying down your credit cards and eliminating debt forever.
On the other hand, if your credit cards have acted as an emergency fund for you during periods of unemployment or underemployment, then you have a better chance of staying out of debt once you pay your outstanding balances. The key in this type of situation is to avoid feeling as though your debt isn’t your fault since it was accrued from unexpected situations, such as an illness. Regardless of how you rack up credit card debt, it’s yours and it can’t be ignored.
Finally, if you use your credit cards on a regular basis to buy groceries, gas or to go out to eat, then you need to examine why you are not using cash. Some people use credit cards to accumulate rewards points. However, unless you can pay off the card’s balance each month, then it doesn’t pay to charge your purchases. By taking time to analyze your spending practices you will likely realize that using a debit card or cash will help keep you out of debt.