The total national bank card debt averages more than seven thousand dollars for each individual in the United States. The staggering amount of revolving debt in this country affects everyone, but what can be done about it? Recent statistics from the Federal Reserve, the agency that keeps track of the flow of money in the United States, shows that Consumers owe over two trillion dollars on their bank cards.
Here are several suggestions that should help you get a head start on managing your debts:
Organize your debts - Take stock of every bank card or other revolving obligation that you have. List your bills based upon the interest rate, from high to low, and make a note of how much you owe on each one. Knowing the interest rate on your monthly bills is crucial; it signifies the price of continuing to owe money to that particular creditor. You want to reduce your debts by clearing off the loan with the steepest rate first. Send as much as possible to the lender with the highest rate and make minimum payments to the others. When the highest interest debt is gone, repeat with the next one on your list.
Negotiate lower interest rates - Contact your lenders or creditors and ask them if they will lower your interest rate. It is costly for charge card lenders to attract new customers; they would much rather keep you than try to replace you. A few bank card issuers will occasionally consent to lower interest rates for their customers who are in good standing. If they agree to lower your rate, you will save a bit of money. Make sure to keep paying promptly, or they may raise your rate again.
Pay cash when you can - It's easy to use a credit card; much easier than paying cash. Get in the habit of writing a check or offering cash rather than reflexively pulling out the charge card. Give some thought to not spending anything at all if you can't afford it. Keep in mind, a credit card purchase is a loan, not a gift. Use your credit cards wisely, and if you can't do that, don't use them in the first place.
A large part of the battle for financial independence is becoming organized. To get your finances in order, you need to organize them, reduce costs when you can and take care to avoid trouble in the future. Financial independence is hard work, but well worthwhile.
©Copyright 2007 by Retro Marketing. Charles Essmeier is the owner of
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debt consolidation and credit counseling, personal bankruptcy and other financial matters.
