Credit Card Debts - Taking Control 

Credit card debts followed close on the heels of the sub-prime mortgage crisis and there was a time not long ago when financial experts had a fear that credit card debts could worsen the economy, which is already experiencing an economic shortfall.

However, statistics indicate that consumers have worked upon their credit repair and credit card management skills, as credit card debts have decreased to some extent.

• Late payments related to credit card repayment dropped by 6% between Q2 and Q3 of 2009.
• Bank of America’s charge-off rate decreased to 13.22% in October 2009 from 14.25% in September 2009.
• Similarly, JP Morgan’s charge-off rate plummeted to 8.02% from 8.12%
• Incidence of charge-offs in the case of Capital One went down to 9.04% from 9.77%.

Falling into credit card debts is not uncommon but if you have fallen into debt, make sure you get out of it at the earliest opportunity as it could disrupt your financial stability and impact your financial freedoms.

One of the best ways to your personal debt situation is to improve your credit card management skills thereby managing your plastic money so that you do not fall into a debt cycle.

There are various ways to do so. Some of the ways in which you can control your credit card debts include the following –

• Use cash instead of plastic money wherever possible:

It is better to use cash instead of credit cards. Using plastic money can make you impulsive and force you into a shopping spree. If you use cash, it restricts your spending habits.

• Pay more than the minimum each month:

When you are paying for your credit card bills, try to pay more than the minimum, which is usually 2% to 4% of the outstanding balance. By doing so, you will be making payments for the principal amount faster which will reduce the amount you owe and reduce your credit card debts earlier.

• Prioritize your expenditure:

You can defer shopping for that jewelry which you have always longed for. If you have to make payments for your insurance premium, pay this first. So, spend keeping in mind your immediate requirements.

• Work out a budget:

Make note of your income and expenses. Prepare a budget and follow it religiously. Identify the expenses that can be avoided. Do not forget to build an emergency fund.

• Take professional help if required:

There are many credit card debt help firms that can help you to take control of your credit card debts. Some of the debt relief options you can avail include the following –

• Credit counseling
• Debt settlement
• Debt consolidation
• Debt management or DMP
• Bankruptcy

However, bankruptcy should be your last refuge. Filing bankruptcy will not only affect you financially but it will cause a lot of mental agony and damage your credit rating. Bankrupcy will remain on your credit report for a period of 7 (Chapter 13) to 10(Chapter 7) years.