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2003 by Mark Carney,
First American Debt Consolidation and Loans
Credit card debt has become a major problem for many people
today. High balances are accumulated without any means to repay the
total amounts or even the minimum amounts due. When people reach
this point they are in deep financial trouble. However, there are
steps that can be taken to prevent problems associated with credit
card debt. Here are some helpful steps to consider:
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- Develop a budget. Determine what your fixed expenses are and
subtract them from your net income. The remaining money is your
disposable income. Allocate this money to various categories (i.e.
entertainment), and determine not to spend beyond what has been
designated.
- Pay off your total balance each month. As a rule of thumb, if
you can not afford to pay off the balance than do not make the
purchase.
- Set a portion of your income aside each month into a savings
fund. This will provide a financial cushion in case an emergency
arises.
- Commit to waiting one day before making non-essential
purchases. This allows you to determine whether the item or
services is actually needed and is an effective way to prevent
"impulse" purchases.
- Maintain a single credit card. People who do not own multiple
cards will never be tempted to use them. If you have a need for
more than one it is advisable to only carry one of them in your
wallet or purse.
- Maintain a modest credit line on your card. Often times card
companies will raise your credit levels automatically because they
understand that higher levels often equate to a higher level of
spending. Avoid this temptation by calling the company and
requesting that they remove the additional credit from your
account.
- Rely more on cash or checks. This technique is very effective
for many people. If they actually have to hand over dollar bills
or write out a check it seams more "real" to them and they have a
tendency to spend less.
This list is not all inclusive but it does give some very helpful
tips and insights on how to avoid the problem of credit card debt.
If you already find yourself in that situation here are some helpful
alternatives for
your consideration.
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About the author:
Mark Carney is a professional consultant with
First American Debt Consolidation and Loans, a debt consolidation
service specializing in financial education,
credit counseling, and debt reduction management
nationwide. | 
