Before You Start
1.Gather recent account statements from your credit cards and other debts.
2.Review the interest rates and finance charges you currently pay on each account.
3.Take a fresh look at your household budget (or spending habits if you don't have a budget yet).
4.Think about your ability to stop using credit on a regular basis and what changes you might be willing to make to improve your financial outlook
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Using credit today means you have confidence in your future ability to pay that debt.
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To use credit intelligently, start by examining the terms of the card(s) you are currently using. Keeping track of your cards, their rates, and your current balances will help you to be aware of how you use credit cards.
If you think you may have too much credit card debt, begin to address it by honestly evaluating your spending habits. Examine your existing expenses to analyze how your money is spent. You will most likely be able to identify the problem areas where you are more likely to spend too much or too readily with credit cards. Then, based on your current spending practices, create a realistic budget to pay off your credit card debt in the shortest time possible while not adding any more debt to it.
As you pay down your debt in a revolving line of credit, the minimum payment is also reduced, thus extending your payoff period and, consequently, the interest you pay.
Never spend more than you earn. Once you have come to grips with this basic fact, managing your debt will become far easier and more rewarding.Spending more than you earn in any given period is a dangerous practice at best, but doing it over an extended period of time can be financial suicide.
