By financen | December 21, 2007 - 6:42 am - Posted in Debt

Credit card companies are running a multi billion dollar industry and their main customers are people in huge debts. They know how to keep people drowning in huge debts. Work out a way from staying out of debts. Follow some tips here and know how to reduce your current debts:

Money is an essential part of life and it has a great influence on an individual happiness. Very few parents take out some time for their children and teach them about money management. In school, so many important subjects are taught but rarely you will see anyone teaching how to manage money. This crisis is common in grade schools, but in high schools and colleges, the situation is even worse. Many of us end up in extremely large amount of debts. We can’t seem to get it together even if we make more money.

I was forced into this trap few years ago. I had a good job, a car, and an apartment. I thought that buying a house in the future will be a good idea and live the “American Dream”. I was so wrong! I wasn’t able to save enough money to be able to buy a house. I had plenty of cards, and I always had to keep huge portion of money aside to make payments. This never allowed me to save anything for my dream home.

Out of all the credit cards that I had, I was over extended in one particular card. The buy now pay later syndrome was well embedded in my head. I always wanted to come over this mentality. I was never terribly behind on my payments and therefore my creditors were always willing to offer some help to me. I just had to make a formality call to the credit companies and request for lower interest rates or the ability to skip a payment. Once they did the arrangements for me, I had to cut up and dispose of the cards. But I never canceled them.

While managing different types of credits, I used to put all my budget information and bills together. I had a software program on my computer that helped me keeping track of my expenses. It is very important to keep something documented so that you can have an overall idea about your present financial standing.

Whenever, a bill came from my creditors, I wrote them down with the name, address, phone number of the creditor, my total balance, interest rate, and minimum payment due, the due date, and if there were any annual fees acquired with the card. Review all the cards that have the highest interest rate and pay more than the minimum due. However, paying in full and in time will be the best thing to do in order to make the best use of the credit cards.

While paying interests on the outstanding balance, always ask the credit company if they can reduce the interest rate. If you are not able to keep your finance in control, take the help of some debt management company who can negotiate lower interest rates with your creditors. Once your payments have become manageable, you’ll start using your cards again.

Minimizing your spending is the key to financial freedom. Make sure to start a savings plan after you’ve gotten your debt under control.

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