You Might Be a Credit Card Addict If… (Part II)

May 02, 2014

Last week, I wrote about signs that you might have an issue with credit cards and potentially even be a credit card addict. Do any of those behaviors ring true with you? If so, you might want to make some serious tweaks to the way you manage your financial life.

One of the first things you can do is look for help.  You can ask a question in the comments section below or pose a question on our Financial Finesse Facebook page and one of our financial planners will be able to answer it. Here are some other things that can help you get out of your credit card rut:

  • List it:  Make a list of every debt that you owe.  You need to see the scope of the problem before you can solve it.  You may not want to see it all on one page but when you do, it may be the jolt that you need to get busy on fixing your financial life.
  • Track it:  Update that list every month so that you can see the progress that you are making. Don’t sweat it if you have one bad month. If you have 2 or 3, then it’s time to be concerned But tracking it (and keeping a record of where you’ve been over a long period of time) can help you stay motivated and on course.
  • Attack it:  Pay off the card with the highest interest rate (if you’re looking for the best math answer) or the lowest balance (if you’re looking for a quick win).  Either way, be ferocious about eliminating one debt.  Be as aggressive as a mother bear protecting one of her cubs.
  • Call each creditor, explain that you’re in a bit of a jam, and ask if there is a way for them to grant a bit of relief by reducing your interest rate.
  • This should have been first bu it is a good reminder. If you have dug yourself a hole….put down the shovel and stop digging!  Stop using the credit cards. Now. Not later. Don’t close them out just yet, but put them away. Shred them if you must. But by all means, stop using them.
  • Confide in someone so that they can be your “accountability partner.” It can be a friend, family member, counselor, or really anyone who you can trust to not be judgmental about how you got to this stage.  As you make progress, your accountability partner can be the person you brag to about how far you’ve come.  If you slip up, they can be there to talk you off the ledge and get you focused again.
  • Create an emergency fund, with a direct deposit, as a buffer from a recurrence of credit debt. Even if it’s $5/pay into a savings account (maybe not at the same bank as your checking account since it’s too easy to go online and transfer balances), you can begin to build an emergency reserve.  That way if something goes wrong, you have savings to rely on and not a credit card.

These are simple steps to help you dig out of a rough spot in your financial life, especially if you happen to be a credit card addict.