Prevent Future Credit Card Debt - FOX 35 News Orlando

Prevent Future Credit Card Debt

Credit card debt starts young in America. Eighteen-year-olds can and do get credit cards, especially if they're headed for college. Enter the big hall on registration day, and there are numerous credit card companies lined up in booths, with easy credit to offer. First the kids start using the card for textbooks, then stereo equipment and clothes. Before they know it, they're asking their parents to bail them out. Unfortunately, more often than not, this behavior is carried into adulthood when our parents are no longer bailing us out.

The big point about debt is this: it doesn't put you in control, it puts you in chains. You want to be making the decisions about when and what you buy -- and with money that's in your pocket, not money you hope to get in the future. Credit card spending can encourage impulse buying, bad-mood buying, and excessive buying. However, if you take control and use your cards wisely, they can become a convenient and helpful tool for spending money that you do have. Here are some things you should know about preventing the revolving credit merry- go-round:

• Get the right card for you. The first thing to preventing credit card debt is having the right card for you. Credit card companies constantly offer promotions with low interest rates -- some even as low as 0.0% interest. If you get an offer for a rate lower than the one you currently have, consider switching or calling your company to tell them you got a better offer. Often, they'll match it to keep you as a customer.
  
  
• When you can, use cash, not credit! If you carry a balance, use your card for as little as possible -- when you write checks, use a debit card or fork over cash for each purchase, you'll be more conscious of your spending and will end up spending less.
  
  
• Pay more than the minimum payment each month and pay on time! Paying more than the minimum is the only way to get you ahead of the cycle. Also, you must always pay your bill on time or a finance charge will be added onto the total, creating a larger minimum payment for the next month -- and than an even larger finance charge will be added to the total again if you don't pay it.
  
  If you are constantly making late payments because the bill is due before your paycheck arrives, ask your credit card company if your billing date can be moved. Oftentimes they will be happy to change it to ensure that you pay the bill on time.
  
  
• Have a system! You need your own deadline each month for paying bills. There are great software programs for keeping track of your financial records (and even writing checks). Quicken, by Intuit, is a popular money-management program. So is Microsoft's Managing Your Money.
  
  
• Negotiate with credit card companies. The amount of credit card debt in this country has made creditors realize that if they want to get any money back, they have to make deals! If a card charges an annual fee, ask that it be removed. Many cards don't charge a fee, so you can always switch to one of these cards. Most credit cards will remove the fee if you simply ask.

These tips should get you started in clearing out the debt you have now and preventing the same situation in the future. Remember, though, you must be aware of the effects of your spending and have the will-power to say, "no" when needed.