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Cut Down Credit Card Debt

Mar 21, 2008
Credit cards have gone beyond being just a common mode of payment and made it as the norm in paying for most daily expenses.

You probably use it at the supermarket, drugstore, bookstore, gas station and just about every other establishment that sells lifes necessities.

But when it comes to debt, credit cards are also one of the major culprits in the growing debt crisis. Credit cards have engendered the idea of spending sprees in consumers, which those same consumers must pay for later on.

If you have already fallen into the cycle of indebtedness, one of the best and most concrete things you can do to get yourself out of your self dug pit is to reduce your credit card debt.

Cut Down on Cards

While cutting up or closing down your credit cards is a good idea, it is not recommended to shred all of your cards.

Even if they are practically pretty debt traps, you have to admit that credit cards are very useful and convenient in a pinch. Keep one or two where you have still got a bit of good standing and then shred, close down or transfer the rest.

Another good way to cut down on your cards is to look for just one or two cards that offer good terms such as 0% interest for a certain period or reduced interest and fees.

They are a bit difficult to find but a call to your credit card company or a little comparison shopping on the internet would be a big help. See what you can do about getting your account transferred to those cards from your existing ones.

One of the biggest problems with credit cards is the fact that they charge sky high interest rates once you begin missing your payments.

With rates as high as 30% in some cases, it doesn not take long for your debts to accumulate. Looking for a new card with better terms or lower interest should help in softening that blow.

Grab Some Greens

Many financial and debt experts say that overspending on credit cards is also partly a psychological problem.

Credit cards don not tell you that you have exceeded your budget, while at the same time continuously providing instant gratification and satisfaction. The satisfaction only stops when the bills come in the mail at the end of the month.

Stash away your credit cards and start using some of actual cash. It will help you stick to a budget because it provides you with tactile and visual cues (i.e. there is fewer and fewer of it) to tell you that you are running out of money.

Plus, you really cannot spend any more once you have exceeded your budget. Maintain the plastic for emergencies but keep them well out of sight when you open your wallet.

Credit cards are not necessarily bad by themselves, and they can actually be good for your credit rating if they are used responsibly and paid for promptly.

Cutting down on your credit card debts, especially when you have got a big one to begin with, might take some time. Give it some responsible spending and a lot of discipline, though, and you will notice yourself gradually going into the black.
About the Author
Zulika van Heerden provides valuable information on her site on how to
live a debt free life.
To read more tips and techniques like the ones in this article go to: http://www.globalproperty.co.za
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