Money Matters - Managing Credit: Getting Out From Under Credit Card Debt
BOSTON (CBS) - According to MyFico 15% of consumers who use credit cards carry more than $10,000 of debt.
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And those with the worst debt don't know how much the debt they have. If you are serious about getting out debt you need to know how much debt you actually have. And you will need to make some life style changes so you are spending less so you have dollars available to pay off the debt.
Create a spread sheet. List each credit card and in separate columns list the interest rate and how much you owe on each card. Then get copies of your credit reports and credit scores. Correct any mistakes.
Contact each of the credit card companies and ask them to lower the interest rate on your cards. If you get no where with the first person you speak with ask for their supervisor. They have the authority to lower your rate and will do so about 50% of the time.
Begin to pay off the credit card with the highest interest rate aggressively. If you have cards with small balances pay those off. If you have a card with a very low interest rate consider transferring your balance from your other cards to that one.
Continue to pay the minimum on each of your other cards and on time.
When you have paid off a card consider canceling it. I did say consider for that could affect your credit score. Your score has many facets to the formula and one of the criteria looked at is the amount of debt you are carrying compared to your limit. They do not look with favor at someone who is maxed out their credit cards.
Always pay your bills on time. Those late fees can be killers. They may be capped at $25 but it adds up. When you go shopping go with a list. You want to shop to buy. This is not recreation and if it is a way to spend a rainy Saturday afternoon, go shopping naked.
Yup! Naked! Go without your credit card and take only a $10 bill and your license. If you find something wonderful you will need to go home to get your cards or more money and with the price of gas it may not be worth returning. Ask yourself do I need it or do I want it?
Try shopping without the kids for they want stuff and they want to stop to eat as well. Wonderful little creatures our kids, but expensive!
If you can't do it on your own consider using Consumer Credit Counseling Services; 800-388-2227 or www.nfcc.org for more help.
Good book: Deal with Your Debt by Liz Pulliam Weston
