How Do You Handle Credit Card Debts?

Consumer debts in the US have been conservatively estimated to be $1.4 trillion. Most of these are credit card generated. Although Americans already own over 450 million credit cards, 2.7 billion solicitations were mailed out in 1995 and this would be an average of 17 per adult. More than 20% of the annual income of the working class is used for the servicing of car loans and credit card debts.In my opinion credit card facility is debt facilitating on rampage. I will endeavour to give practical steps to eliminate ( based on my experience) or bring to the barest minimum credit card debts.

I cannot say I have succeeded in not using credit card but have brought the use to the barest minimum by arranging my priorities. I have been able to create a criteria in deciding what is what taking on credit. I know there is good debt and in order to seperate the bad from the good, after consulting with experts and careful consideration of my perculiar situation, I came up with the following criteria:
1 A good debt is one that is economically justifiable, it must be worth it. The advantages must far outweigh the disadvantages. I rarely go into debt for consumables.Anything that can be deferred I defer.
2. A good debt is the one I can work into my normal spending plan. Nobody plans to fail but most people fail to plan. Ultimately failing to plan is planning to fail. You must have a plan for every sector of your life and then you must work your plan!
3. A good debt is the one I am able to pay based on my present financial condition and not my anticipated future earnings. You may call it pessimism but that's the best way to handle issues of debt. If you avoid this rule then you will have to contend with Murphy's law.
4. A good debt is the one that doesn't tie up my investment potential. If it does this this more or less means that my future growth is being tied up.

So you have it, I believe if you follow these simple rules as I do, you will keep your credit card debts ( infact all debts ) to the barest minimum and manageable levels. See you at the next posts

1

Is Debt Consolidation the Way to Go?

Debt Debt Consolidation sometimes referred to, as bill Consolidation is something that comes up in the mind of most people in debt. Basically what consolidation does is to simplify ones’ finances and helping ones’ cash flow by giving one payment instead of several. It must be noted though that this only works when one is disciplined in avoiding taking additional debts.
Bill Consolidation enables one pay off all or many of ones’ debts and start fresh with a new one. In the case of credit card debts, one consolidates by transferring all one’s balances to the new account; Experts highly recommend that a credit card offer that allows you do this should be accepted
The problem with Consolidation is the false sense of accomplishment it gives one. Nobody can borrow his way out of debt and as such consolidation loans do not eliminate debt. The best it can do is to make your debt easier to pay off. It can also make you buy more time. Rather unfortunately, studies do reveal that 80% of people who consolidate loans end up in deeper debt distress than they were in before. It is not advisable for Home Equity loans to be taken as consolidation loans because there is no sense in putting ones’ home in jeopardy when there are less risky ways of getting out of debt.
Experts seem to agree that consolidation loans work best for those who though in financial danger, are not yet in distress. Families in distress most likely won’t qualify for a consolidation loan until they make a major lifestyle changes which would break the patterns that created the debt distress in the first place (Please see my previous article “how to stand on your resolve to be debt free”)
So you wear the shoes and you know where it pinches. Consider the options, the advantages and disadvantages, then ask yourself the question: Is Debt Consolidation the Way to Go?

2