Getting Your Family Out of Credit Card Debt

Today in America, we have a serious problem with credit card debt leading to our financial ruin. I am sure most or all of you have had or will have issues with accruing debt through the use of credit cards. With the current events of the American economy, credit card debt is becoming a major downfall of the average to lower income earning families. Many of us are not being taught by our parents what to even look for in a credit card company when we open up that first account. I know my parents didn't.

Flash back about ten years ago. I was a new college student; out on my own for the first time in my life, and excited about it. I got that first application in the mail and thought, "sure, I need this just in case of an emergency". I still remember that first card. Visa... it sang to me. That first card turned into three. I added a Victoria Secret card and a Macy's card by the end of that first year of school. You must keep in mind I was 18 and worked only a part time job of less than 20 hours a week.

I eventually got into a pickle with these bills. I was spending more than I was making and as my parents paid for my college tuition, I had to make B's or better in all of my classes. The job ended up having to go when those grades began to slip. For three years, I continued to spend and only pay the minimum on my cards; even as I bounced from part time work to unemployment.

No one taught me how to budget or even how to be frugal. I saw something and I wanted it, until I was in such a jam that my mom had to bail me out. I eventually married and we took out a personal loan at a bank to pay off all of the credit card debt that I had accrued and closed each of those accounts down one by one.

I have had to learn the hard way how to be a smart spender and budgeter because we forget as we charge onto our plastic that we have to pay that money back or interest will accrue on the amounts we have spent, meaning we spend more money than if we had just paid cash.

So here are some things to do if you find yourself in the same place I did ten years ago and you feel hopeless to ever pay the debts completely off. There is hope!

1. Stop charging! You should pay cash as much as possible so that you don't "over-spend" from your bi-weekly or monthly budget. If there is something you absolutely feel you need, save up for it. It is so much more gratifying when you have worked hard to save and make that purchase.

2. Transfer balances to a low interest card. If you have an account whose interest is 21% or above, close it down! You will never pay the accrued and interest amount off. Your minimum payment for this interest amount goes mostly to the interest that has accrued for the month. The minute the card is closed, interest stops accruing on it, so you can pay it off.

3. Pay debts off smallest to largest. If you have several accounts open, pay the smallest amount first and then close the account.

4. Try dividing your monthly minimum payment in half and paying this smaller amount twice a month. This will help by allowing you to have a little more income in between those pay checks and help your budget become more balanced. My husband and I pay all of our bills this way, even our house hold. We have found that we have more disposable income this way and now we don't have to charge on our credit card.

5. Make micro payments. If you find yourself with some extra cash, use it as an extra payment to a card. You should try and pay a little more than the minimum payment each month so that more money is going toward the principle amount on the card rather than the monthly interest balance.

6. Seek some part time work to help you pay your accounts off. If you don't have enough disposable income to pay off the overwhelming balances, mow some lawns! Every penny helps bring those numbers down.

7. Close those accounts down! We have made it a rule in our house that our one card is for emergencies only. Make a plan and stick to it. This may mean you do a bit of sacrificing, but isn't that what all moms do?

You can get out of debt. Learn about average credit card interests and make sure that your cards don't have those extreme rates. If they do, those should be closed immediately so that you can pay the amounts off. Remember that the higher your debt becomes, the worse your credit score becomes. As a last resort, you can contact companies that deal with debt resolution. They will close the account for you and pay off the accrued debt. You end up paying them back at a much smaller interest rate.