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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.

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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.