Most of us are looking for a way out of debt. If you’re one of those people who’d moved heaven and earth looking for credit card debt help, then the playwright William Shakespeare has some parting words for those whose debt payments are monstrous: ‘”Neither a borrower nor a lender be; For loan oft loses both itself and friend”. Wise words that people just seem to ignore, for in 2008, American household debts reached $13.8 trillion.
This kind of lifestyle went on until the latter part of 2009, where the results and the aftershocks of this kind of irresponsible spending were felt as houses were foreclosed and properties were repossessed, therefore sending most Americans to the poorhouse or worse.
Debt, in itself, isn’t bad. It’s a typical type of debt that becomes bad when you neglect it. For instance, there’s a certain type of debt that is necessary to enjoy long-term benefits. For instance, many people would often loan than use their own money to buy a house, since they usually cannot afford to use their own money. This isn’t bad, in fact, there are tax advantages to a loan-bought house as opposed to a cash-bought house, and this can be good in the long run. That being said, what we need to do eliminate credit card debt is to control our finances. That is to say, we should define the line between what we need, and what we want.
This is why many people find themselves today in a situation where instead of them owning a lot of things, they find that the bank owns them. This is because of unchecked spending on unnecessary luxuries where they find themselves in a situation where they need to hide from creditors; without even doing anything, their debt rises month to month because of unseen fees, and worse of all, their credit gets trashed, and they have their backs against the wall with nowhere to go.
But of course, there’s good news: things aren’t as bad as they seem. You CAN get out of this debt situation you are in. The bad news, if you can call it that, is that you have to totally overhaul your lifestyle. This kind of thing just doesn’t change itself overnight, you have to put work and effort into it to make it work.
These things can be found on ‘Avoiding the Credit Crunch’, but just to get you started, here’s what you need to do. First thing you have to do is to consolidate all of your bills and figure out all your expenses. That way, you can easily find which of your expenses are necessary, and which ones you can totally live without. In this way, you can reduce credit card debt and, at the same time, simplify your lifestyle, which is heavily needed if you are to aim for total freedom from debt.
There are a lot of bills which we can call unnecessary: for instance, the cable bill. Regular outings to the local bistro, or favorite trips to your nearest watering hole. You can live without all of these. The necessary things which you can’t afford to omit are bills for the electricity, water, heating, clothing allowance and expenditures for your everyday fuel for the ride to work. The hard part in all of this is you have to cut off the unnecessary things and focus on what is really needed to get out of debt, or else you will keep piling it on and just keep burying yourself more in debt.
Try and think for a moment…let’s say your local credit card company charges you fees every month. They also charge you 28 per cent more because of your really bad credit. Then that means that for every purchase that you make, you will have to pay an extra 28 percent when you could just have saved that 28 percent and used it to pay off your debt for good. And for every 28 percent interest, a dollar becomes a dollar 28…kind of like a waste, isn’t it?
As in ‘Avoiding the Credit Crunch’, next thing you have to do is to jot down every little thing you owe. Painful as it may be to see it on paper, it has to be done. After doing so, you need to write down how much you earn in a month.
Now, say you rake in about $ 2000 per month. You’ve stripped down to the bare necessities in an effort to cut on expenses drastically, and have made a commitment to completely cut off luxuries until your salary balances itself out. Meaning that you have enough to pay the debts, pay your monthly expenses, and still have enough to be put away into savings.
Now let’s say that your minimum of expenses to spend per month are $1000, and the payments that hound you amounts to roughly $1500. Given the figure, there’s a chance that you can make an extra $500 per month, but that’s only if you sell some of the items you’ve bought on eBay, or maybe get an extra job. If you’re mired in debt, you really need to consider and find ways to make money, but you still have to budget what you earn.
The next thing you do is to call up all of your debtors…people or institutions you owe money to, and open up negotiations about the amount of money you’re going to pay them each month. Luckily debtors are reasonable these days. Certainly a trickle of money each month is better than no money at all, and you’ll be surprised at how accommodating and formal they can get based on these terms. What you need to figure out is how much you can pay each, at a fixed amount, and how to get them to nod in agreement.
When calling, don’t be pompous; you’re the one in debt. Be polite, be apologetic about why you’re behind payments every month. Explain your situation and tell them how much you can afford to pay them. Surprisingly a lot of institutions will be very cordial and open when discussing these terms.
These tips and more, which are also available on ‘Avoiding the Credit Crunch’, are guaranteed to jumpstart your efforts in credit card debt elimination. Who knows, if you’ve learned to master it, you’ll be back to that time before you were so encumbered with debt, a time when you can afford any luxury you wanted.
For more about ‘Avoiding the Credit Crunch’, please Visit: Debt Solution Secret.