Credit Cards in 2009

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by: barrywaters
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Word Count: 513
Date: Sat, 7 Feb 2009 Time: 6:23 PM
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2008 was a rocky financial year for most everyone in this country. Many were at a loss for what to make of their economic futures. As consumers look to 2009, many are trying to regroup and figure out a plan for their financial futures. Some have spent within their means and will be able to recover. Others have racked up debt on their credit cards and are seeking ways to reduce or erase that debt. It is estimated that the average number of credit cards per consumer in this country is four. Credit cards are a common way of making purchases. If utilized appropriately, they are a handy resource. On the other hand, credit cards offer an enticing path to spend beyond your means. It takes commitment to pay debt off, once it is accrued.
If you are dedicated to paying off your credit cards, you should begin by no longer spending on those cards. It may be common sense, but erasing debt while you are accruing more is not easy. Also, resist the urge to apply for new credit cards. Simply change your habits. Write checks, use cash or a bank card that automatically takes the amount from your account. Next, examine your budget to determine where you might be able to cut expenses. The easiest way to do this is to cut your discretionary spending. Stop eating out, going to the salon, paying to have your car washed and purchasing entertainment items you do not need. Use those funds instead to make payments on your credit cards to reduce the balances. If you cannot cut your budget any more, you may look into picking up additional work or selling unnecessary big ticket items (like downgrading to a less expensive car).
After you have a handle on your budget, develop a routine of slowly paying down the debt on your credit cards. Always pay more than the required monthly minimum on your balances. Continually paying only the minimum payments means that most of what you pay is going toward interest paid to the bank. You will actually start chipping away at the balance, when you make more than the minimum payments. Work on the card with the least amount of debt first, if you have debt on several credit cards. The emotional benefit of seeing some debt paid off will offer a reward and let you see the light at the end of the tunnel. Whenever you have extra money, make an extra payment on your credit cards. Once you start paying off your credit cards, close the newest ones and keep the oldest. Having long established credit card accounts that are in good standing reflects positively on your credit score and credit report. Maintain your commitment to paying off your debt until the balances on all your credit cards have been paid. If you start using your cards again, remember how hard it was to pay off debt. Stay on top of your balances and use your card wisely. You are responsible for every purchase you make on your credit cards.

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For more info on credit cards for bad credit, go to here.

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