Understanding Your Position

Consumer Debt is now at an epidemic proportion and there is no sign that this will decrease.

Getting into debt is an addiction much like drug abuse and alcoholism. Most credit companies extend credit without educating consumers on the how, what, or why of financial management. Like a pusher giving that first hit of heroin and allowing a little more until the mark is hooked, credit card companies continue to extend credit rather than standing fast until the consumer can't make the payments that are necessary.

The addition can stop by taking the first step of "NO MORE PURCHASES ON TIME"! If you don't have the cash, don't buy. I know that this is too easy to say when people need to get to work, buy clothes and eat, but there are steps you can take to stop the revolving mess you got into.

1. Come to the realization that you have a problem and do something about it. You need to discuss it with your spouse or significant other and make this a priority.

2. Create a budget! Many people don't really have a full idea on where their money goes each month. By starting a budget, a consumer can see where they can cut costs and apply that amount to reducing the debt.

3. Stop using your credit cards and borrowing! Now the only loan you may want to think about is a debt consolidation loan that will make a payment to one and pay off the others. Once you take a loan of this nature, you need to cut up your credit cards that you paid off.

4. Contact your creditors and work out a plan with them. Talk to them about lowering your interest rate. Almost all will work with you if you are willing to make effort to repay.

5. Contact a Consumer Credit Counseling Service (CCCS). They can help you work with your creditors and usually reduce any interest to nothing or a fraction of what you have now.

6. At last resort you may have to apply for bankruptcy. (I don't really suggest this as you can usually do the first 5 above before you resort to this.)