Sunday, April 7, 2013

Eliminate Debt Temptations: Live Without Your Cards

If you analyze it carefully, credit cards are created to put us in debt. The fact that it allows us to purchase things that we cannot afford at the moment develops a very bad habit of living beyond our means.

A majority of the people owning cards have found themselves to be in debt at one point or the other. Some of them are able to recover without any problems. These are the people who have sufficient income to cover their payments and keep the whole debt from going out of control. They are the lucky ones.

Unfortunately, a lot of people who find themselves buried in credit card debt usually do not have enough income to make significant contributions to their current balance. This results in a debt that continues to accumulate every month because of high interest rates and other finance charges. Even if you get a debt relief program that will allow you to pay off your debts despite your limited resources, one way to help you stay out of debt is to eliminate your cards from your regular purchases.

This is not to say that you will completely live your life without credit cards. You can keep one card so you are able to maintain a good credit score for future financial assistance needs. What you need to do is to remove the habit of using your cards for unnecessary purchases.

But how do you eliminate credit cards from your life?

First things first, pay off your current balances. You cannot close an account if you still have pending payments to make. There are many debt relief options that will help you pay off what you owe. You have debt consolidation loans, debt management, balance transfer, debt settlement and even bankruptcy as your options.

Once you have paid off or had your debts discharged, you need to close your card accounts. Choose the one with the lowest interest rate and keep that. When we say keep it, that literally means you store it in a place where you will not be tempted to use it unless it is an emergency. That does not include your wallet or your purse.

You need to commit to a cash-only purchase if you really want to stay away from debt. This is especially true for your basic expenses. Financial experts believe that people find it harder to part with actual cash. This makes cash purchases easier to control. You get to think twice before you spend your money. This is not true for credit cards. So if you want to have a tighter grip on your spending, use only cash.

Adapt a budgeting system that will allow you to monitor where your money goes to. This is important so you can make sure that your limited income goes to your priority expenses. Not only that, it will give you an idea as to how much you should spend for food, transportation and other categories on your budget.

Making the decision to eliminate debt temptations will help you live a debt free life. On top of that, you need to practice the right financial management skills. It takes a bit of getting used to but should you succeed, you will eliminate a lot of stress from your life.

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