By: CCN.com
If you have been wondering what is this 'Credit Card debt' that
everyone seems to be talking about, its time you knew what it
actually is (even if you are not in credit card debt yet). Well,
you might be getting into a debt trap yourself and the earlier
to know about it, the better it is.
'Credit card debt' is simply the amount you owe to the credit
card company. If you hold a number of credit cards and run a
debt in all or most of them then you are already in the middle
of what we call as 'debt trap' and it calls for immediate
attention. Some people just keep getting new credit cards and
keep shifting the debt to the new ones until they reach the
limit on that credit card too and then they go for yet another
one. This is how the debt trap works. You keep hoping that the
things will improve and you just keep getting deeper into debt.
So what's the way out?
Once you start exhausting your monthly credit limits and start
missing your payments, you start earning a bad credit rating
with the credit bureaus. A bad rating is not only going to
prevent you from getting new credit cards but will also act as
an obstacle when it comes to car loans, home mortgages or any
other loans. So how do you handle this situation?
First of all you need to understand that there is no magic wand
which can help you wipe out your debt. If it has to happen it
has to happen only through your own efforts. So once you know
that you are in a debt trap and decide to get out of it, you
need to sit tight, analyze and prepare a list of actions you
need to take. Here are the 3 basic steps for debt reduction:
Gather all your debt information in a document form (could be a
spreadsheet). This should include details like What is the
amount you owe Whom do you owe it to What is the APR you are
paying on this. How frequently do you use that card Any other
details which you feel are useful Once you have these details
for all your credit cards. Do a total to arrive at the total
amount you owe.
Check the following: How much cash you have in your bank account
You income Your expenditures With this information ready,
analyze how much of debt you can repay on a monthly basis. You
might consider cutting down on your expenses or looking for
alternative source of incomes to aid you in reducing your debt
quickly.
Prepare your strategy. This may include the following: Which
debt to pay off first (based on the APR rates) Switch to a lower
APR card Consolidate debt Seek advice from a financial advisor
Declare bankruptcy Just follow these 3 steps and you will have
the blue print of debt reduction ready.
About the author:
About the Author
Rudy Hadisentosa: CCN.com is a free online
credit cards review and
application website. We offer credit cards selection from
visa,master cards, discover, american express and many others.
We have quite some categories and hundreds of credit cards
selection to fit your need.
Apply
for a credit card at CCN.com.
