Although debt is a dirty word to many, the fact of the matter is that the vast majority of us are in debt in some way or another. No matter how hard we try, there are times when you simply need something and cannot afford to pay for it straight off. For example, school tuition is the most common form of debt, and most of us cannot afford to pay for our educations up front. Discharging debt doesn’t have to be difficult.
So, most of us are dealing with debt in some way or another, but are we managing it correctly? Let’s look at a few signs that may indicate that your debt is taking control of you, instead of the other way around.
1. You can only make the minimum payment each month, and even that is a stretch.
This is a very bad sign, especially if you have more than one credit card. Your monthly minimum payment is only a suggestion from the credit card company and usually is not enough to pay down the interest that the account racked up for the month. This means that you are caught up in a spiral that may take years to correct.
Solution: Consolidate several cards into one low interest card. Make larger monthly payments to pay down that interest as well as the actual debt.
2. You use your cards for the majority of your purchases.
Credit cards should be used really only in times of emergencies or when you would like to take advantage of the ability to get a larger ticket item and pay it off gradually. Many of us fall into the trap of using our cards for gas, groceries or things that we really don’t need. Over time, these purchases really add up.
Solution: Only use that card for a real emergency. Set up a budget for yourself and remove your cards from your wallet if you have a hard time sticking to it. Never spend more on your credit card than you can pay off in a month’s time if you had to.
3. Late payments and over balance fees occur commonly.
Once you’re trapped in a debt spiral, late payments start to become more common as you try to scrape together enough money every month to make those payments. If you’re already close to your limit (how a credit card limit is determined), a few late fees can put you over the top, and then you’re dealing with over balance fees as well. This can quickly get out of control, especially if you are only making minimum payments.
Solution: Always send your payment in 10 days before it is due. Many card companies use 9am on the morning of your due date as a time cutoff. If that day’s mail doesn’t have your payment, you will be considered late. If possible, try to pay your payments online so you don’t have to worry about it getting delayed in the mail, but watch out for surcharges that card companies will sometimes tack on for online payments.
Photo Credits: 1
Originally posted 2008-08-07 05:36:39. Republished by Old Post Promoter
Related Posts -
Consumers Need to Exercise Caution as Credit Card Rates Climb Many consumers are finding that even though they have had the same credit card for years, and have paid the balances off completely every month, their monthly statements are suddenly appearing with a surprise: An interest rate hike by as much as three percentage points. Some consumers are not worried...... -
What is your Credit Card Costing You? Most people do not put enough thought into how much their credit cards are really costing them. Sure, you may think that you are aware of all of the costs associated with credit, but there are also a number of fees and charges that can go completely unnoticed among consumers...... -
How to Keep Cash Flow Coming In One of the main problems facing Americans today is a lack of cash flow. As the economy gets worse and gas prices go up, it is getting harder to make ends meet. If you are completely reliant on your paycheck each month, the last few days or weeks of the...... -
Smart Credit Card Debt Credit card debt is a global problem that has led many to the poorhouse. However, with smart management, credit card debt can actually be a good thing. Let’s look at how to have smart credit card debt that will help your finances instead of hurt it. The premise may be...... -
Ruin Your Credit Fast, pt1 Granted, there are a wide variety of different ways that you can ruin your credit over time, but do you want to know what the quickest and most dangerous ways are? Here are five ways that you can quickly and effectively destroy your credit. 1 - Break your budget. Sure......
Related Websites - Your Minimum Payments Influence Your Debt Repayment Anchoring is brand loyalty, it's our sense of what the norm should be. Credit card companies have discovered a way to create anchoring among customers in a way that earns them more interest. You see, the lower your minimum payment is, the less you (the average person) will think it's...
- Finovate Startup 2009 Live Twitter I am attending Finovate Startup 2009. It is an action packed 1 day format which I belive will lend itself perfectly to a live twitter. Stay tuned it should be an amazing day. http://twitter.com/BlogTrafficExch In the break I have scheduled some talks with SimplFi, Mint, and Calendar Budget. I am......
-
Interesting Credit Card Marketing From AAA and Bank Of America My wife paid her credit card a couple of days late. Between work and taking care of the kids (that includes me too) she forgot the exact due date. It isn't a card that's used often. It happens. Unfortunately we got hit with a no payment fee (about $30) and...... -
Credit Card Offers - How to Separate the Wheat from the Chaff This guest post comes from DR, the blogger behind The Dough Roller, a blog focused on sound money management. His blog covers a wide variety of money management topics including tips on how to make more money, spend less, and invest the rest. If you like this article, please consider...... - Killer Credit Card Fees and How to Avoid Them Credit card companies are in business for one reason - to make money. Sure, they will tell you they offer you a chance to enjoy life now, or have an emergency line of credit, but rest assured - the thing they are more concerned about is whether or not you......
Categories:
Debt, Goal, Personal Finance, bad debt, credit cards, good debt
Tags:
1 comment so far ↓
You forget #4 and the biggest indicator of all…you get cash advances on one card to make a payment on another - at the same bank.
Travis Tritt told an audience that he used to do this. I just couldn’t believe it, but the response from the audience seemed to indicate that it was plausible. When it comes to debt, I can believe just about any silly story because I’ve heard some real goofy ones.
Clair
Leave a Comment