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Are You Trapped in the Credit Conundrum

Welcome back to another credit card Thursday.  Today I have a post that is being presented by Megan.  She will be helping me here at Your Daily Finance as I look to bring different points of views about personal finances.

She has a lot of talent and is looking join our community.  I hope you enjoy her posts as much as I do.  Please help me in welcoming her to the team.  Take it away Megan….

Credit Cards Got You Trapped?

You probably have a credit card in your wallet. You may even have two or three. This doesn’t necessarily mean anything negative. We tend to look at credit cards as a thing of evil. But in fact the only thing evil about a credit card is the way we’ve learned to use and rely on them.

The option of an “extra” couple hundred dollars is very soothing to the mind. Any emergency expenses can be charged and payed off later. The problems start when those new jeans turn into an emergency.

Trust Me You Are Not Alone

It happens to nearly everyone. You’re trying to make ends meet, something unexpected comes up, and the next thing you know you’re taking out another credit card to make payments on the first. This is treacherous territory you’re roaming into and it’s all too easy to close your eyes to the problem until it takes over your whole life.

Once you open them again you see what a wreck is left behind. Late utility bills, interest rates as big as your minimum payment for the month and barely getting rent together. But don’t close your eyes again. You can fix this.

There’s work in cleaning up every mess. The innocent baking of cookies can take hours to clean up if you spill the flour. It’s exactly the same with credit cards. When you’ve maxed everything out there is no comfort of that hundred or two for emergencies. Here are some steps for cleaning up the mess.

First Things First Cut Back

This is the hardest step but without it your debt will just keep growing. Keep reminding yourself when you put down the new movie you want that it’s just temporary. Someday you will be out of this but only if you put down that movie.

Credit Credit Problems

And that shirt. And the cool speakers for your iPod. In fact you probably shouldn’t come to Target anymore unless you have a list of necessities and stick to it.

Stopping Wasting – Use What You Already Have

Instead of buying new things to entertain you, look at what you’ve bought in the past. Odds are there are games you never finished or books you never read. Sometimes people can get so caught up in the guilt that can come with debt that they ignore what they bought.

Always learn from mistakes. By doing that you need to face them. If you’re like me, that means actually learning to play that harp you bought even though you’ve never exhibited any particular musical skill. Since you already have it try putting it to use.

Make It Rain – But Not That Way

Throw as much money at the problem as you can. If you’re cutting back expenses you will have money left over. Try to meet the minimum on all your cards to avoid late fees, but start chucking every penny you can find at one particular card. Try to find the card with the harshest interest rates and fees and make it your objective to pay it off as soon as you can. Once that one is payed off, take what you were paying on it and apply it to the next card.

If you’re worried about remembering to pay on time and how much to pay, there are companies which will withdraw from a checking account a certain amount each month and pay for you. They will also roll over what you were paying on one card to the next. It’s best to do it on your own to avoid their rates, however it’s well worth it if you feel like you can’t keep up on your own.

It Is Not the Spoon That Bends

Change your mind. We like to reward ourselves for doing the right thing. This can be a great motivator if used properly. Instead of promising yourself dinner out for a job well done, learn how to make your favorite dish yourself at home.

Instead of promising yourself a vacation when your cards are paid off, make the paying off of the cards itself your goal. Building castles in the air is a way of coping with the stress of owing money. Bring yourself back to earth. Once you are out of debt it won’t seem nearly as bad down here.

Those are just a few tips but I promise they will help if you follow them. This is an experience to learn from. It isn’t shameful or sad. It’s just a thing you can, and will, overcome.

About M. Clark

43 comments

  1. Great tips! Having a large credit card balance to pay down can be daunting and it’s important to take active steps like the ones you’ve laid out to overcome it. It’s so important to stop buying things you don’t need until your debt is paid off, and I would add selling things you don’t need can help pay it down quicker.

    • Thanks for stopping by DC! We are glad you enjoyed the tips! I would say at least minimize buying as its hard for people to just go cold turkey and stop buying anything. Selling things you aren’t using or dont need is a great point.

  2. Welcome Megan and good post! When it comes to credit card, you need to have self control on your spending. Paying your debts on time will help you a lot and you can also automate your payment if you tend to forget those payday dates. You need to be careful when spending on credit cards as it may be overwhelming during repaying.

    • Hey Rita! Thanks for stopping through and welcoming Megan to the team here. Self control is a big one but automation of payments really help a lot. We have to remember that those bills on the credit card were caused by us. Just gotta keep you head and stay focused.

  3. Love these tips. Particularly to learn from our mistakes. After all, if you can’t learn you’ll never grow and therefore never change.

    • Taynia I agree you gotta learn from those mistakes. No need making the same mistakes 2-3 times. Have to learn to change! Thanks for stopping by and commenting.

  4. Credit cards are like snakes, they will bite if you don’t handle them right. That being said, I think you can use them to your advantage by taking advantage of the reward points, delaying expenses for 3-5 weeks while the money draws interest in your savings account and as a barrier against potential identity theft. Just be careful you don’t go to far and end up carrying a balance from month to month.

    • Free Money Minute I agree! But I also have to say that not everyone has the control to put things on credit and pay them off. Sometimes putting on the card leads to spending the real cash on something else. Its easy to allow the balance to creep up when you carry balances from month to month. I know cause I have been there before with credit cards. Not a good feeling. Thanks for stopping through!

  5. I love your very first point. Credit cards are not evil – the way we’ve learned to use them are. Credit cards can be beneficial if you can keep your spending in check….which definitely can be challenging!

    • I totally agree with Alexa. I think CC’s have a bad rap, but when used right, they can bring many benefits to the user! Great tips Megan!

      • Lisa I think its normal for people to blame other things before looking at one self. The credit card did spend money on the clothes or food I did. So why would I blame the card. Simple because its easy to do so. There are a lot of benefits of using a card we just have to use them as such. Thanks for stopping by.

    • Alexa I have to agree with you! When I first read this from Megan that was the first thing that stuck out. Its never the cards its us and how we use them thats the problem. Most of us just haven’t been taught the proper ways to use credit. Thanks for coming by and leaving your insight.

  6. Hey Megan, great post here. Debt is one of the scariest things to deal with and, it can be almost impossible to pay off if you don’t have a solid plan in place to make it happen. Thanks for the great tips!

    • Joshua, both Megan and myself thank you and are glad that you enjoyed the post. Debt is a struggle and its easy to fall back into the deep dark depths credit card hell. Thanks for stopping by.

  7. Don’t forget, you own the credit card, not the other way around.

  8. Credit card debt is the worse. I hate when I pay money on a credit card and then the interest comes along and makes you feel like you never paid anything in the first place. I’m hoping to be completely free from credit card debt by this time next year. I’m keeping my fingers crossed.

    • Hey Romona I think this is the first time seeing you comment here so welcome! With hard work you will be able to kick that credit card debt in the rear. Looking forward to following you on your journey. Thanks for stopping by hopefully you stop by again soon.

  9. This is a great post, so well done Megan. Having been in some serious cc debt before, I know all of these tips all too well, but they work.

    • Grayson really glad you like the post even more excited that there are people out there that know these tips actually work. I sucks to know they work because that means we were in debt. But hey you live and learn. Thanks for coming to the site and leaving a comment.

  10. Thanks for the article, Megan! We’re using the debt snowball method to pay off our credit card debt. We started with paying off a store credit card with a 30% interest rate and we’ll move on to the next one when this one is paid off this month. We also took on a renter and all the money from that income will be going towards debt payment as well – we’re looking to be credit card debt free hopefully in a year!

    • I hear a lot of people using the snowball method. If it not broke dont fix it! Keep rocking with the snowball method. Glad you appreciated the article! Having a renter can be a great source of passive income to make it rain on debt! Thanks for sharing your story with us Lindsey and good luck paying off the debt.

  11. These are great tips, especially the Make It Rain (clever title to that section). Every little bit counts, and once I started really tracking my expenses, it helped take care of some “leaks” where I would mindlessly spend (and more towards repayments).

    • LOL the make rain was a great heading for that part. Tracking and goals are very important especially finding and getting rid of leaks. One of our leaks this year was groceries! Thanks for stopping by Anna and commenting.

  12. One easy way to pay off some of that CC debt is to sell some of that stuff around your house that goes unused. We did a purge a few months back and collected $1200! That’s a huge amount that can be thrown directly at any outstanding credit card debt. Nice post!

    • GamingYourFinances I never even paid attention to that when I had debt. I was stupid and sold things then bought more. As I matured I realized what an asset old things could be in helping pay down debt. Great idea about doing a purge but make sure you pay debt and not buy more stuff. Thanks for the comment!

  13. It’s definitely not easy to go through a big switch like that. Old habits die hard. To me, the trick is rather than trying to break habits, try to make easy new habits that improve your situation. If you can stay consistent with it, those new habits will eventually replace the old ones. After all, you aren’t looking for a temporary fix. You’re looking for a new way of living.

    • Old habit die hard Matt but they do die if you are willing to put in the work. Either way though switch or creating new habits you have to be willing to put the either to come up with new habits or making adjustments on the old ones. Long term goals should be the answer not short term fixes and mends. Thanks for the comment and stopping by.

  14. Credit cards can be terrible for your financial health. good tips!

  15. I no longer have credit cards thanks to Dave Ramsey but yes, I felt trapped when I did have credit cards (earlier this year!)

    • Hey Monica sorry to hear that you felt trapped. How are things going for you now and did you like the Dave Ramsey approach?

  16. “Change your mind” is great advice. Getting out of a bad credit card situation will definitely take some alternative thinking. You can’t keep doing the same things and expect the problem to go away. The only way to beat credit card debt and improve your finances is to recognize the need to think differently about money and spending.

    • GYF a mind is a terrible thing to waste and sometimes even harder to change. You have to be willing to do whats needed. I agree you have to admit there was a problem and change it. Thanks for the comment!

  17. The worst part is when you are in a bad place you don’t even enjoy the 50 days interest free credit or the miles etc just the late fees and double digit interest. I would try to at least refinance to a 0% deal to have more time to pay the balance without incurring too much interest.

    • Good point Pauline! When you have free interest or mile it should be icing on the cake not something that you cant enjoy. How do we tend to let ourselves get into these problems though?

  18. Great tips. Make me think about my debt situation and possible solutions. My advice is never let the debt grow over your head. It will be very hard to get rid of it.

  19. Martin I think you are right in that we should never let it get over our heads. The problem is that we don’t pay attention often until it is over our head. That mindset has to change and be taught early on.