You have two or more major credit cards comfortably snug inside your wallet. You are quite proud of them and they seem to act like your security blanket. But are you sure that security is the commodity being offered by the credit cards? The credit cards offer immediacy. That is, you can immediately purchase an item you like using your credit cards. Without the plastic, you will have to scrimp and save for weeks or months before you can afford that certain item. With credit cards, you incur a debt each time you have the plastics swiped. And, looking closely at the debt balance, you notice that it wasn’t reduced much each time you pay.

To get out of a debt or a loan, the best you can do is not to pay your minimum balance. Each time you pay the minimum balance, you are letting the credit card company or the lender take as much interest as they can out of your hard-earned money. A debt of $3,000 may not seem much and you certainly can take care of this in less than six months. But your minimum balance reflected in your statement of account is surprisingly small. You smile. Do you really think that the minimum balance was made small because the credit card company was considerate? Think again.

How much is the total amount you have paid for all your monthly payments for credit cards, loans and debts? Perhaps you have paid more than half of the price of the item that you purchased. Check the debt balance you still need to pay. The balance is still high, after all the payments you have made. For how long will you be paying so that you can pay off the debt? Obviously, it will take you a long time.

To fix the situation and to put you on a more stable financial situation, you need to take steps. The first of these is to come up with a written plan to pay off all your debt. Second, pay much more than your minimum amount. This will significantly reduce the balance. Third, keep your credit cards snug inside the wallet. As much as possible, it must not go near a cash register. Use it only for emergencies, not for a big midnight sale. Another step you can do is to move the balances on cards that charge high interest rates to cards with lower interest rates.

And lastly, never get a payday loan to pay off your credit card payments. Though credit cards charge high rates, the rates of payday loans are even higher.

Michael Colucci is a technical writer for Low Interest Credit Cards

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