Dealing with Credit Card Debt
In 2006 US credit card debt stood around $750 billion dollars. If you are like many Americans you also may have outstanding credit card debt that you really wish wasn't there.
So what can you do about it?
1. Stop spending -- Get rid of those consumption expenses, food, clothes, bar tabs. Yes, you've got to eat, but spend cash instead and don't buy expensive convenience foods or eat out.
2. Take out a loan at a lower interest rate -- credit cards are designed so that you pay them off indefinitely! Thats right, the credit card companies don't want you to ever pay off your balance. The reason why is that over the next 10 or 20 years you will pay off many multiples of what you originally spent earning them a profit. One solution may be Prosper.com.
3. Consider a Pre-paid credit card -- prepaid credit cards, also known as collateralized credit cards allow you the convenience of carrying plastic but without the ability to spend more money than you have. These are often used by people who have recently gone through bankruptcy; if you don't deal with your debt now this might not just be a option but your only choice.
There is no way to white wash this, credit card debt sucks. I love credit cards, but if they are used unwisely they will strangle you financially.
In order to flourish financially debt should only be used on something that will give you a greater return. Most of the things we buy with credit cards are here today and gone tomorrow. That is, you'll never see a penny back from your purchase.
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