One of the main problems you face in dealing with sound financial conditions is credit card debts. Due to the convenience of handling credit cards, we often have the habit of using it everywhere we want it without considering that it is with real money that we are working. You should always consider that we are using money for shopping whenever we use credit cards and that we have to pay the balance off later. So careful handling is essential to avoid a credit card debt. Never pay more than that is in your hand even when you have credit cards with you.
Everyone is aware of credit cards, and how it helps one in a taut situation. But more than a redeemer it turns into an evil, in disguise of being a liberator, when you don’t know how to use it. Yes credit cards can pluck the whole joy of your life; they can bring your life to a standstill if you don’t know how to use it to your favor.
Many of us are well aware of its negatives, yet we have to turn to it; because there is no other choice. Some people just keep on piling credit card bill payments. In order to pay one bank, a person will take another card and pay off the first. And then the second and this vicious cycle will continue for the rest of the life. In such situations one can take of consultants who often have saved their clients from such situations. These are saviors that take care of all your credit card issues. They pay off debts to your creditors and ultimately you are supposed to pay them alone, astonishingly at a very minimal rate of interest. Now this is something that can wipe out the credit card jinx from your dear life. So go ahead and find help in this regards.
You can repay your revolving credit in a very systematic manner through the debt snowball method. Revolving credit in our discussion would mean things like credit card where you enjoy a continuous line of credit to be repaid on a monthly tenure. The debt snowball method has become popular because of its effective results and is considered a great financial restructuring tool by some of the debt management company (ies).
The method requires you to list every debt you have at the moment. The list should preferably be created in an ascending order of the debt amount. Also list the APR or the interest rate that you pay for the particular debt value.
Against each of the debt amount create a new column and list the minimum amount that you need to pay as per the credit card company requirements.
The next step in this debt management plan is to understand your cash flows (cash inflow particularly). Calculate the amount that you would be able to set aside for payment of your revolving credit after you have paid the household expenses and the min pay for all of the different revolving debt. Use the remaining of the cash flow to repay the debt which is at the top of the list. Start working down the list every month and soon you would have done a great debt management job. It’s one of that debt management program that every debt manager swears by.
There area a hosts of reasons when a person has to turn towards debt. A repetitive reliance on debt then creates a situation where the borrower defaults towards his repayments schedules. With the high costs of education, health, clothing, insurance the situation worsens. As a result of all these events, if you find yourself struggling with debt problems, you should consider a debt consolidation and seek counseling for it.
Debt consolidation comes can be availed by two ways. The first one is unsecured consolidation. This is worth if your total debt as on day is around 20% or less of your annual incomes. For any percentile above 20%, secured debt consolidation should be the preferred finance tool.
Before committing yourself into any such finance consolidation, it would be prudent for you to conduct a comparison shopping of the rates and the terms and conditions of the offer. Talk to your counselor as well as your bank before signing on the dot line. Read the fine print carefully to avoid another financial imbroglio.
While you are working on your debt consolidation services, have a hard look at your spending habits. Restructure your habits to suit the new order of time. Shred some of the habits that in your opinion do not add any value addition to you and your lifestyle. Prune down your monthly budget by at least 10% immediately and around 20% – 30% in the next 3 months.
With all this prudence, you would soon find your financial stability improving and confidence springing back into you. Money is not everything until it’s gone. Spend smart, plan smart, be Cuckee smart.