I would imagine that many of us have either dealt with credit card debt, or at least know someone who has. The fact that the average household has more than $15,000 of credit card debt (of those that have credit card debt) tells me that many are intimately acquainted with such debt. If you have dealt with it, then you can relate to how unbearable the feeling might be, but the good thing to remember is that it is possible to slay the beast of credit card debt. While I am disciplined with my credit cards now, and use them to leverage free money for vacations I was not always that way. I discovered the lure of the credit card in college and graduated with almost $25,000 in consumer debt. The tips I’ll share are not so much action-oriented, rather, they’re ways to wrap your mind around the debt so you can start to work on paying it off.
Face the Reality of Your Credit Card Debt
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A common temptation when dealing with credit card debt is to ignore the problem. As someone who tried this route, I’ll let you in on a little secret…that does not make the debt go away. In the months leading up to realizing the problem I had, I did what I could to avoid dealing with reality. That only set me back several more months and once I got the first notice of a card being deactivated it was like a cold cup of water being thrown on you while asleep. By waking up to the problem you can start paying off debt quicker and deal with the fallout of your spending decisions.
Looking back, my credit card problems were due to a spending addiction. I was simply not content with life and used credit cards to fund the lifestyle that I wanted, but really couldn’t afford. Whether you have this same addiction or not, the debt is likely (generally speaking) due to some sort of living beyond your means. I had no real choice but to stop spending cold turkey and live with that challenge. Stopping immediately might seem impossible, but it is very possible – it just requires a shift in thinking. Speaking personally, this meant viewing each purchasing decision as asking myself whether or not I needed the item in question to survive. If I did not, then the decision was an easy one to make. Ultimately, you’ll not be able to overcome credit card debt if you’re not willing to take a hard look at your spending habits and deal with them appropriately.
Look at Who You’re Borrowing From
I had a very ignorant view of how credit cards work when I was in college and thought they were basically free money. Oh, how I wish I could go back and smack my younger self silly! They’re by no means free money, but something that when used inappropriately, can be very destructive. Understand that credit card companies love unpaid balances because it means they’re making interest off of you. If you have a high credit card balance then they’re likely making a nice sum off of you each month. As an aside, once you get those credit cards paid off, you’ll likely notice that you’ll soon start getting regular credit card offers in the mail weekly. ‘Why,’ you ask? It’s because they know you might have a problem and they want to make more money off you. This is not meant to demonize credit card companies, but to make clear that they’re out for themselves and no one else. Keep that in mind when you’re swiping your card next time – they’re extending you a line of credit which MUST be paid back.
Have you ever had credit card debt? What did you do to get it paid off?
Image by SqueakMarmot/Flickr