Fighting the War on Credit Card Debt

Tips from the Experts Can Help You Survive the Crunch

By Stephen Mazeika

It’s no secret by now; Americans are feeling the weight of mounting debt. The machine of our economy is sputtering to a crawl, and ordinary Americans’ financial well-being is being dragged along with it. Debt is part of the problem, as many Americans who have opened lines of credit within the last decade are finding it harder and harder to get the monkey off their back. Don’t start selling everything you own just yet; there are easier ways to start lowering your credit card debt. Credit counselors offer five simple ways of significantly limiting the risk associated with credit card debt and help consumers find ways to manage their finances and credit cards efficiently.

Tip 1: Contact Your Credit Company

This should be the first move taken to combat mounting debt. When contacting your respective credit institutions, you may find yourself in a position to re-negotiate your interest rate with your bank. This of course is contingent on your credit history, as late payments and repeated maxed-out cards will not help your cause.

Tip 2: Avoid Rolling Unsecured Credit into Equity Lines for Payment

Experts warn that this maneuver, although sometimes able to secure a better interest rate, is not always the best choice. “You’ve essentially rolled that unsecured debt into a 30 year mortgage on your house and now you’ve got to consider paying that over a longer period of time,” advises credit counselor Rick Schram.

Tip 3: Make Extra Payments, No Matter How Insignificant they may Seem

Making these extra payments will improve your credit score, and help reduce your monthly payments over time. This means that if you already have significant debt piled up, you can pay it off in a much smaller amount of time by contributing a little extra here and there rather than just by paying the minimum.

Tip 4: Transferring Your Balances May Sometimes Help

“Transferring [a] balance is ok, as long as you don’t abuse the privilege that creditors give you,” Schram comments. This means that if you can shift a current balance to an introductory period that includes zero interest and you manage those payments effectively and pay your bills, it could be a great way of alleviating some of that pesky debt you had before.

Tip 5: Income Storage

One practice that has been universally praised as a smart way to keep your ‘head above the water’ by many experts is the practice of saving income. Experts recommend always having anywhere from three to six months of income saved up for emergency purposes, because when that ‘rainy day’ comes it may be a lifesaver.