Things You Must Know for Avoiding Credit Card Bankruptcy

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Things You Must Know for Avoiding Credit Card Bankruptcy

Posted On : May-18-2010 | seen (347) times | Article Word Count : 584 |

It is very easy to get into a situation where your credit card debt becomes unmanageable. The reality is that the credit card company makes more profit if you pay only the amount mentioned in the ‘minimum amount due’ column and that is why it is highlighted in the statement. This minimum payable thing gets ingrained in your mindset. The next time you want something very badly but cannot afford to, this minimum amount payable option flashes before your eyes and you yield to the temptation and go ahead with the purchase. The reality is that you shouldn’t be doing that because actually you cannot afford it and borrowing money to pay for something that you could do without. Over a period it becomes a habit and before you know credit card bankruptcy is staring at you.

What adds to the problem is that over time you opt for multiple credit cards and fail to keep track of the debt you are accumulating. Believe it or not, that is one of the most common reasons why people seek credit counseling services for avoiding credit card bankruptcy.

Credit card companies fix your credit limits on the basis of your affordability, which is not necessarily what your monthly income is. Credit limits allowed by credit card companies are primarily on the basis of your previous payment record. For example, if you have been paying the full amount of your purchases for one year, they will increase your credit limit even if you do not apply for extended credit. They presume that you will pay your dues in a timely manner. The problem arises when you start taking it to as your right rather than a facility to be used with diligence. That brings us to the first rule of managing credit card debt: never use your credit card unless you are sure that you can afford to pay the full amount.

The next in line relates to your monthly payment. Paying the minimum amount due is not the right thing to do. The credit card should be treated as a facility that allows you not to carry large amounts of cash. It is also something that you can use, sparingly though, for making big ticket purchases that you cannot do without. While buying expensive items you need to be sure that you will be able to pay the full amount plus interest charged on it within a reasonable period. Till the time you are able to revert to paying the full amount every month, suspend plans for buying expensive items.

The sad part is that despite all warnings, suggestions and advice people tend to overspend. The temptation of owning more than the Jones next door is so much that people tend to overlook and go ahead and buy what they actually do not need and cannot really afford to. That is why credit counseling services are in business. More people are looking at debt solutions such a debt consolidations and debt settlement now than ever before.

It is true that a debt settlement company will arrange a debt settlement and reduce interest burden and get the lending company to allow you more time to pay your credit card debt. But do you really want that to happen. If you cannot resist temptations to borrow against your credit cards and want to avoid a credit card bankruptcy like situation what you need is a debit card.

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<h1>Things You Must Know for Avoiding Credit Card Bankruptcy</h1> Author: <a href='http://www.articleseen.com/profile_Debt Solutions.aspx'>Debt Solutions</a> It is very easy to get into a situation where your credit card debt becomes unmanageable. The reality is that the credit card company makes more profit if you pay only the amount mentioned in the ‘minimum amount due’ column and that is why it is highlighted in the statement. This minimum payable thing gets ingrained in your mindset. The next time you want something very badly but cannot afford to, this minimum amount payable option flashes before your eyes and you yield to the temptation and go ahead with the purchase. The reality is that you shouldn’t be doing that because actually you cannot afford it and borrowing money to pay for something that you could do without. Over a period it becomes a habit and before you know credit card bankruptcy is staring at you. 
	
What adds to the problem is that over time you opt for multiple credit cards and fail to keep track of the debt you are accumulating. Believe it or not, that is one of the most common reasons why people seek credit counseling services for avoiding credit card bankruptcy.

Credit card companies fix your credit limits on the basis of your affordability, which is not necessarily what your monthly income is. Credit limits allowed by credit card companies are primarily on the basis of your previous payment record. For example, if you have been paying the full amount of your purchases for one year, they will increase your credit limit even if you do not apply for extended credit. They presume that you will pay your dues in a timely manner. The problem arises when you start taking it to as your right rather than a facility to be used with diligence. That brings us to the first rule of managing credit card debt: never use your credit card unless you are sure that you can afford to pay the full amount.

The next in line relates to your monthly payment. Paying the minimum amount due is not the right thing to do. The credit card should be treated as a facility that allows you not to carry large amounts of cash. It is also something that you can use, sparingly though, for making big ticket purchases that you cannot do without. While buying expensive items you need to be sure that you will be able to pay the full amount plus interest charged on it within a reasonable period. Till the time you are able to revert to paying the full amount every month, suspend plans for buying expensive items.

The sad part is that despite all warnings, suggestions and advice people tend to overspend. The temptation of owning more than the Jones next door is so much that people tend to overlook and go ahead and buy what they actually do not need and cannot really afford to. That is why credit counseling services are in business. More people are looking at debt solutions such a debt consolidations and debt settlement now than ever before.

It is true that a debt settlement company will arrange a debt settlement and reduce interest burden and get the lending company to allow you more time to pay your credit card debt. But do you really want that to happen. If you cannot resist temptations to borrow against your credit cards and want to avoid a credit card bankruptcy like situation what you need is a debit card.About the Author: Debt Solution is a negotiation process that has been tested and developed over years of experience by our team of professionals in the field of finance and credit card debt. Our professionals are highly skilled in each of their fields of expertise. For more information’s log on to: http://debtsolutionsgrp.com Article Source: <a href='http://www.articleseen.com/Article_Things-You-Must-Know-for-Avoiding-Credit-Card-Bankruptcy_19156.aspx'> http://www.articleseen.com/Article_Things You Must Know for Avoiding Credit Card Bankruptcy_19156.aspx</a>

Article Source : http://www.articleseen.com/Article_Things You Must Know for Avoiding Credit Card Bankruptcy_19156.aspx

Author Resource :
Debt Solution is a negotiation process that has been tested and developed over years of experience by our team of professionals in the field of finance and credit card debt. Our professionals are highly skilled in each of their fields of expertise. For more information’s log on to: http://debtsolutionsgrp.com

Keywords : credit card bankruptcy, debt settlement, credit counseling services ,

Category : Finance : Finance

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