Surveys shows 50 percent of cardholders don't pay their bills in full
or on time. More than 40 percent of cardholders say they don't know the
interest rate on their cards. Suppose you carry a $1000 balance from month to
month. That costs you $180 in interest a year if you have a credit card with no
annual fee and an 18 percent interest rate. But many credit cards do have annual
fees, especially the gold cards with the enticing travel rewards. You'll be
astounded at what you pay once you factor in the fees.

You're fooling yourself when you slice and dice your debt onto several credit
cards. Better to have everything in one credit card, so you know exactly what
you owe. You'll have an easier time monitoring your indebtedness and not letting
it get out of control.

Here are some signs of credit card trouble:

• You're making only the minimum payments on your accounts.
  
• You're missing payments or due dates.
  
• You're near the credit limit on most of your cards.
  
• You're borrowing from one card to pay another.
  
• You don't know how much you owe.
  
• You worry a lot about money.
  
• You use credit cards to meet your weekly or monthly living expenses.
  
• You transfer balances from one low-rate card to another every few months,
  just before the introductory offer expires.

It's time to address your financial problems if you recognize some of these

patterns in your own life. Here's a six-step program to help you get out of the
trouble.

1. Be honest with yourself. Do a complete analysis of all your debts, the
   interest rates and terms.
   
2. Decide how much money you can use to pay off debt each month.
   
3. If there is a shortfall, consider getting a consolidation loan or line of
   credit at a lower rate.
   
4. Consider selling investments to pay off high-rate debt. If you own a house,
   bump up your mortgage at renewal time.
   
5. Pay the minimum amount on each card. Use what's left to pay off the card
   with the highest rate.
   
6. Don't use the cards any more. Cut them up or put them into a box.

Buying everything with cash, cheques or no-overdraft debit cards forces you
to confront the fact you can't afford something. With a credit card, you can
always afford it.

About the author

Tony Reed is the author of " Don't carry a balance on credit cards", please visit his website Credit cards & loans for more information.

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Tags: surveys, investments, signs, credit cards, living expenses, debts, mortgage, interest rate, interest rates, minimum payments, due dates, cardholders, consolidation loan, shortfall, indebtedness, travel rewards, renewal time