CreditCards — Tips

Great responsibility comes with having a credit card but with the number of people who have a credit card at an all time high as with the spending it was obvious that the debts would soon follow. The swipe and spend culture has created massive debts and people are now realizing just how foolish they have been just spending indiscriminately.

Here is an audio book about credit cards:

Rich Dad’s Guide To Becoming Rich Without Cutting Up Your Credit Cards,
written by Robert T. Kiyosaki with Sharon Lechter.

These days conventional wisdom seems to state that in order to become wealthy you must cut up your credit cards and save by putting the maximum amount of your paycheck into your 401k retirement plan.

Although this plan might work for some people, Robert Kiyosaki urges readers to try a different approach. He outlines how to get rid of “bad debt,” including credit card bills, and other unsecured debt, while maximizing “good debt,” such as home mortgages or other investments. Kiyosaki’s plan will help readers finally break through the psychological barriers of self-doubt that can serve as the biggest obstacle to becoming rich.

Once this point has been reached then it only remains for some form of relief from the credit card debt to be arranged. However, the first thing to do before opting for credit card debt relief is to stop using the credit card all together because if a person keeps on using the credit card it will be almost impossible to devise a debt relief plan.

Once the debtor has decided to do something about the debts incurred they can start looking for a suitable debt relief option. There are various alternatives available to them but the three most common options are detailed below.

The next step is to try and find a credit card that is offering special low interest rates on balance transfers, this way all your debts can be consolidated into one loan which can be paid back in regular installments. A good alternative to this option is a consolidation loan at a low interest rate where the debtor can decide exactly how much he can afford to repay each month after the outstanding debts have been repaid.

Once this amount has been agreed, the person with the credit card debts must ensure the payments are made in full each month until the balance is clear. Remember, consolidation by credit card or loan will only work if the debtor has not already damaged their credit history.

If debt consolidation is not available then debt negotiation remains and this is better left to a debt relief company that can deal with the credit card companies directly and negotiate payment conditions. The negotiations usually mean that a set amount of the debt, normally half, will have to be repaid and the remainder written off.

Bankruptcy should always be viewed as a last resort when all other options have been tried as there are serious consequences to this course of action. The debts may be clear but they will find it hard to get any form of credit for a long time and will have to rebuild their credit history from scratch although it does enable them to have a fresh start. Whichever credit card debt relief option you take, remember that this should only ever be a one-off as important lessons about managing finances should be learned so the situation is not repeated.