Credit Card Debt Management Made Easy
Contributed by Luey
Credit Card Debt Management Made Easy
Management of credit card debt is crucial to your financial freedom. Lets face it, carrying credit card balances is like carrying a heavy load on your shoulders. Debt can dwindle on your mind and cause unnecessary stress and discomfort in your life. However, managing your debt is easier than you think.
Debt Management and Your Credit Score
Your credit score, commonly known as a FICO score, is what lenders look at to determine your credit worthiness. Some of the factors that are considered in determining your FICO score is; the amount of time credit has been established, late payments, debt outstanding vs. credit available. In order to keep your credit score in good health, it is smart to pay down your balances in a timely manner.
Also, do not fall for the misconception that if you close an account once it has been paid off it will make your score more appealing. In fact closing lines of credit can have more damaging effects on your credit score by increasing your debt to credit ratio.
Stop Incurring Additional Debt
For most of us carrying heft credit card balances, we did not ever anticipate it growing to this magnitude. Debtors tend to underestimate how much they actually owe. Take this opportunity if you have not already done so to honestly access your situation. Once you derive at that number, tape it to your bathroom mirror. This will give you a daily reminder of the damage is at and will help you make consumption decisions throughout the day. It will be hard to justify purchasing another pair of black pants when you have that daunting number to wake up to each morning.
Credit Card Debt Management in Baby Steps
Regardless of how much you owe, break your debt down into smaller manageable chunks. If you are constantly looking at the big number, you may get overwhelmed and lose hope. The average American owes approximately $9,000 in credit card debt. If you are like the average American and only make an average salary and have other expenses such a rent and car payments, then the likelihood of being debt free by the end of the year is virtually impossible.
