Credit Cards: The Looming Crisis

Your debt situation is in danger and you may not even see the crisis coming. Credit cards are the bane of most personal debt these days and more and more people are falling victim to spiraling interest rates and payments that never get near paying down the principle owed. We all use credit cards and need them from time to time, but use them smartly. Use these tools to learn how to manage credit cards properly and don't let them put you into debt.

Put all your cards on the table

Lay out all your credit cards and their contracts and look at them. The best way to see all the credit cards you are tied to is to download a fresh credit report. You may be surprised at how many you have accumulated over time or are still carrying high balances on. The average consumer today has up to 12 credit cards at any given time (see how many credit cards is too many), a recipe for financial catastrophe. Now that you see the cards, put them in order from highest interest to lower interest. Anything over 10% should be marked as bad debt and needs to be eliminated now. Follow these steps to see how to get it done simply and all by yourself.

Consolidate your bad cards

Take those high interest cards and do one of the following. Pay them off today in one lump sum and then destroy the card themselves to avoid using them again. If paying them off today is not an option for you, start moving balances and consolidate your cards. Refer to that list you made and choose two of the lowest interest cards you posses and start transferring the balances to those cards now. If you can keep all your credit card debt on a couple of good cards with less than 10% interest, you are looking good already. Once you have consolidated your credit card debts to the low interest cards, destroy all the old cards and eliminate the temptation to take a step backwards again. This one trick alone will save you hundreds over the short-term and good easily add up to thousands over the long haul.

Consider using the debit card

Debit cards are a fantastic option to credit cards. They function the same and can be used everywhere you use your regular credit cards. The key difference is a debit card is swiped right from your checking account, so you never pay interest and you never spend more money than you have. Debit cards can save you a lot of headache and keep you restrained when making purchases by limiting you to spending only what you can afford, sounds like good common sense, right?

Related Articles:

Bill Consolidation : Consolidate Bills : Bill Consolidation Loans

Top 10 Ways To Get Help With Bills

How to negotiate your debt with debt collectors and creditors

Getting Yourself Out Of Credit Card Debt

Credit Card Law Changes and How They Will Affect Consumers