What about credit card debt?

Credit cards are a big problem for many people.  I would say not to own a credit card but I know that many of you do have them and feel that they work for you.  The reason why I would not recommend them is that many people use them for purchases that they don't have the money to pay for at the time.  That's a fast way to get into more debt than you can imagine.  Trust me, I have seen this happen far too many times. I would recommend that you do not use your credit cards until you have your financial situation under control.  If you must use a credit card then please only use it on emergencies.  Sorry, but wanting a fun night out on the town does not qualify as an emergency.

Step #1.  Again, if you must use a credit card, keep a close record of every purchase.  Write it down in your bank register as if it were something for which you wrote a check.  Just mark it as a credit card purchase where you would have written the check number.  When the credit card bill comes in you will already have the amount deducted from your checking account and then it will be easy to cover the bill.

 Step #2.  Be sure to reconcile your credit card statement with your checkbook, write a check for the payment, and pay it in full each month on or before the due date.  If you're only paying the minimum payment due each month you're only helping the credit card companies get richer.  It really isn't helping you at all.  I would recommend that you always pay off the balance each and every month, this way you will be helping your credit score and not helping the credit card company get richer off the interest that they will charge you.  Remember that every time you're late on a credit card bill the credit card company makes a note of it on your credit report.  This can end up destroying your credit rating and causing you to pay a higher interest than those with a good credit rating.

Step #3.  Always remember to make the purchases stay within your budget.  You can even check your balance each week and pay it then, to help keep your spending in check.  I recommend this way if you feel that you have to have a credit card. 

Step #4.  Again, I do not recommend credit cards but if you must use them, do your research.  Try to avoid credit cards that charge an annual fee.  Many credit card companies pay you back in the form of refund checks or reward points.  Do the research and get the card that works best for you and your budget. 

Step #5.  Always remember to pay it off each month.  If you already have a credit card with a balance that is more than you can afford to pay off each month, then call the credit card company and talk with them about your bill.  Always remember to be very polite when you are dealing with creditors.  In many cases, credit card companies will work with you to lower your payment amount and / or your interest rate.  The credit card company wants their money as much if not more than you want to pay off their bill.  In most cases, they will work with you.  If they will not work with you, remember to remain polite with them.  You never want to make a bad relationship with a bill collector.  There are also credit counselors that may be able to help you with your credit card situation if the credit card company cannot. I would also recommend that you take all of your credit cards out of your wallet and put them in a safe place to insure that you don't have them handy to purchase things that can't be paid off at the end of the month.