How Does a Person Get Into Credit Card Debt?

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We are living in an increasingly cashless society and in these rough economic times credit card balances tend to spiral out of control. Many of us are moving so fast, always on the edge, and any bump in the road such as an unexpected auto repair has to be charged to our credit cards. Other unplanned repairs, medical bills, etc. can push up a credit card balance to dangerous levels.

Free Money Credit card debt can come about when you overspend and / or underpay on your credit cards, leading to a significant debt balance. Sometimes, this is the result of what some financial advisors call the 'free money fallacy'-or, the belief that credit is essentially free money and then can be spent without repercussions.

Debt Relief It is no wonder that methods of credit card debt relief are being carefully bought after by many. The solutions to credit card debt vary in presentation, but their central tenet is invariably the same: put more money in than is going out. Only by doing that can you successfully pay off credit card debt.

Bankruptcy As debt increases, your ability to effectively pay it off quickly and efficiently decrees, leading to a greater likelihood of you facing debt-related ramifications, which includes bankruptcy.

High Interest Rates Credit card debt can, after a certain point, grow without your assistance, thanks especially to high interest rates, but also to irregular fees and protection schemes. It is possible that your total debt balance can double or even triple over the course of a single payment period if it's left unattended! In the end, your best bet for quickly relieving the pressure of debt is to pay more and pay often.

Monthly Minimums Some may think that simply paying the monthly minimum payment is enough to cut your debt down, but it is anything but. As your debt grows, the amount of interest tacked on to your debt grows as well. Often, your monthly minimums cover nothing more than this accrued interest. So, when you pay your monthly minimums, you are not paying down your debt, but rather paying down the interest, which serves to strictly keep your debt at a steady level.

Control Early On Your best bet for staying away from the worst aspects of credit card debt is to control it early on. Pay off your card every payment period. However much debt you have accrued, pay it off before it can be layered with interest or fees. If you use the card at the beginning of the month, pay it off at the end. Clearing the slate every month is the best method for dealing with debt.

Pay On Time The last thing you need is to have to pay late fees. These added-on penalties not only hurt your pocketbook, but may come back to haunt you if and when you call the credit card issuer to negotiate a settlement of the debt. Paying late affects your credit and gives the credit card company ammunition to raise your interest rate further increasing your debt. It's best to pay on time.

Stop Using Card Sometimes, however, this may not be an option due to unfavorable financial circumstances. In this case, your best bet is to stop using your card immediately … put it away, hide it or even cut it up. Ignore the temptation to add to the debt. Then, begin paying it off in whatever manner seems most optimal to you. Paying the minimum monthly payment multiple times through the payment period is a proven method. As is paying a single, large payment. Regardless of what method you choose, implement it as quickly as possible. Once debt begins growing, there's very little way to stop it short of paying it off in one fell swoop.

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Source by Ken Muller

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