Nobody likes credit card debt, but sometimes it is necessary.  Recent studies have shown that Americans spend $104 dollars for every $100 they make.  This is resulting in another statistic that shows that the average American has over $8,000.00 in credit card debt. If this is you or one of your clients, there are some things you can apply to your course of life to get to the point of being credit card debt free.  There are tons of people that have dug out of this debt ditch and you can too.

 

Follow these 5 steps to being credit card debt free. 

1. Stop using your credit cards!   This is the most important step.  If you cannot use your bank card or money you make every month then that means you need to reassess your budget.  If you simply like using your card, but cannot pay it off every month, you are living above your means.  If this appears to be tough for you try taking the cards out of your wallet or even cut them up until you can get things under control.
   
   
2. Reduce your interest rates!  This is probably the second most important step although all these steps are very important.   If you have lower credit scores you probably will find yourself or your clients with high interest rates, in upwards of 20%.  A good rate is anywhere from 0% to 9%.  A lot of people are scared to call and ask for a lower rate, but remember the person you are calling will very well have the same situation and feel sympathetic to you, if anything don't be intimidating; these people are working all hours of the day so they aren't someone you have to be inferior to. If you are a long term customer with a good history they should accommodate you.  Tell them you might switch and transfer your balance otherwise, that will get them into action quickly.
   
   
3. Always pay more than the minimum amount!   Credit card companies have recently moved to something that fascinates me.  They are offering consumers the option to not pay for a month and pay next month.  That is just more interest for you to pay.  Same goes with only paying the minimum.  Remember that the balance is calculated based on a system so that they can extend your payment plan as long as possible to make optimal profit.  If you get extra money, put it towards your card, setup online payments so it is easy for you.  Get a second job if needed, but get rid of that debt.
   
   
4. Stop the credit card offers!  If you know your credit scores are lower you are going to get offers for cards with high rates.  If your scores are good you will get good rates or 0% balance transfers.  Keep your eyes out for those, but for the most part if you are tempted, get into a company which will eliminate your junk mail or call the three bureaus and make sure they don't sell your information.  You can search on the web for the numbers to call as well; there are a lot of them.
   
   
5. Consolidate all your unsecured debt!  After you feel that you have a handle on things and the interest rates are better, try consolidating all the debt.  Don't close out of your other cards either; you could be erasing important history for your credit scores.  Remember there is hope; you have to work at it just like a diet.  A little bit at a time, but start now.  Not only do you lose money with the interest you pay on credit cards, but you lose the potential for future earners where that money could be invested. 

Putting these steps into place will get you or your clients on track.  I know a lot of real estate agents that will call me and say "I have a good candidate to purchase, but they said they have a lot of credit card debt".  Well put them on this action plan and they will be in a house sooner then they think.  You can also read my Blog about credit reports to help you out with some credit card secrets at: http://toddeastman.typepad.com/todd_eastmans_mortgage_ma/credit_reports/index.html