How to Take a Break from Using Credit Cards

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By shenandoah, eHow Member

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Take a Break from Using Credit Cards

The amount of credit card debt we accumulate as individuals is staggering. Industry reports tell us the average US household had $8,329 in credit card debt at the end of 2008. And there's a hefty price to pay for slipping on payments... penalty fees for credit cards were estimated to be $20 billion for 2009.

Slowing down your credit card spending is one way to help manage credit card debt. Here are some tips to do just that and to pay down your existing credit card debt.

Difficulty: Moderately Easy

Instructions

Step 1

~ Put your cards on ice, literally ~

Taking your credit cards out of your wallet and freezing them is a strategy that has worked for many people. It's not as drastic as cutting up your cards and doing without them altogether. Put them in a container of water in the freezer and forget about them for a month or two, longer if you can.

Here's the rub... if you have a bonafide emergency, you can get to a card and thaw it. But the rest of the time, it will be safely out of reach so that you're not tempted or able to use it.
Step 2

~ Take an extended 'time out' from all online shopping ~

Eliminate this activity for a while, until you pay down or pay off your largest credit card balance. Chances are you can do without shopping online altogether, especially since these purchases tend to be impulse driven and not necessities.

While your at it, trash catalogs as soon as they arrive in your mailbox.
Step 3

~ Use your debit card or cash for groceries and meals out ~

Restaurant and bar bills, fast food, grocery stores and convenience stores represent a fast growing category of credit card usage. Consumable goods like food should be paid for by cash or debit, not financed or subjected to interest and penalty fees.
Step 4

~ Organize your credit card debt as follows ~

Line up all your credit cards. Put the card that has the highest interest rate on the top. If you don't know what you're paying in interest on each card, find out right now, from the statement or by calling the customer service #.

Focus on paying off this card first. Send as much money as you can afford each month to get that balance to zero as quickly as possible.

Make more than your minimum monthly payment on other credit cards, even if it is only $5 or $20 more than the minimum.
Step 5

~ Watch/react to changes in interest rates on your credit card accounts ~

Gone are the days of a permanent fixed interest rate on your credit card.
Pay attention to your statement and letter notices you receive from the card issuer. If your rates shoot up, apply for a balance transfer to a lower-rate card.
Step 6

~ Having high levels of credit access doesn't mean you should utilize it ~

The average US consumer has access to about $19,000 on all of his/her credit cards combined. That is a whopping amount of credit type debt, which if fully utilized, will have interest and other fees added to it. Using credit wisely means being able to afford what you buy with it.

Comments

cynthialarson said

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on 3/16/2010 These tips may be more difficult for some than others, so if someone is reading this and feeling discouraged, just follow through with as many tips as possible, and make a commitment to gain control of expenses. Marvelous!