6 Sure Fire Ways To Get Upside Down in Debt! - (Con't.)

6. Play the balance transfer game.

Taming the debt monster is mostly about a mindset to be free of debt, and discipline.

Don't Feed The Debt Monster

The balance transfer game is a shell game, that seems to make a lot of sense on the surface.   There's a zero interest, or low interest card you can apply for.   Get it, and move all the debt from your high interest card to the low interest card, planning to pay it off in the 6 months low interest window.

The problem here is that you now have 2 cards which you can stack up debt with.  The low initial interest rate card is rarely paid off in the 6 month window.  The card issuers know this, that's why they offered it to you.   With the low interest card now maxed by moving all the high interest debt to it, you begin to re-use the high interest card as it now has breathing room.  Once the no interest window is over.. BAM... you now have 2 high interest cards, with balances, that you are paying for.

If you are given the opportunity to get a no interest introductory card, chances are that it is because your credit has improved enough that a card issuer is prepared to take additional risk offering you more credit.  Perhaps, your present card holder is not prepared to lose your debt business.   Try calling your current card holder, and explaining that you have another card offer, and asking for a reduction in interest to keep you as a customer.

It doesn't always work, but chances are it will work more often than thinking you will pay off the low interest card in time to not be paying on 2 high interest cards instead of one!

6 Sure Fire Ways To Get Upside Down in Debt! - (Con't.)

5.  Don't Create A Budget!

"How can I blow my budget, if I don't have a budget?"
 Famous last words, for a fast trip to the debt mill.

If you create a budget and stick to it you have a guideline to know when you are off track.  You will see the progress you need to make, because you planned it.  When you fall off the plan, you will see clearly how little, or how much it takes to get back on track.

6 Sure Fire Ways To Get Upside Down in Debt! - (Con't.)

4. Ignore your credit report and credit score.

Ignoring your credit report is the same thing as saying that you totally trust the folks issuing your credit -  what the heck, let them run the show  -  they certainly have your best interests in mind!  WRONG!

Here's the truth of the matter.   The FTC believes that over 25% of all credit reports contain errors... that's 1 in 4.  Gather 4 friends together.. one of you has an error on their credit report.

Not only do things go wrong, but sometimes there are way past due bills you have legitimately forgotten about, maybe someone gets ahold of your credit card... Not knowing your credit value puts you at a huge disadvantage.

A very rational strategy is to get your free credit report - you are entitled by law to a free report every year.

Take a look at it, and dispute any mistakes.  Then one by one, find the items on that report that hurt you the most and go to work on them.  What you will find is that as your credit score improves, you will be able to negotiate for cheaper credit.   Move your score in the right direction, and next thing you know, you get offered a cheaper credit card.  Pay off the expensive card, and use the cheap card, and instantly you have saved money!   Hold off on major purchases like a house or a car until your score is stronger, and save more money over a long period of time.

Of course, if you don't know what your credit looks like, you are flying blind - and are easy prey to predatory lenders... Get your free credit report - its easy.  Manage your credit and start having more money available to you at the end of ever month.

6 Sure Fire Ways To Get Upside Down in Debt! - (Con't.)

3. Overspend or simply spend spending future earnings that haven't been banked yet.

That contract is going to come in next month with a big fat commission, so I can afford to buy the television today... right?

One of life's little realities are that the money doesn't always come, or come when you expect it, but the credit card bill is always on time.

Another trap is that the money comes, but before the credit card bill arrives, and gets spent on a celebratory trip, and then the credit card comes, and there's no extra money to pay it.

One of the best strategies is to spend when the money gets there, don't spend ahead.

6 Sure Fire Ways To Get Upside Down in Debt! - (Con't.)

2. Making only the minimum payment on your cards.

The simplest way to be sure to stay maxed out in debt?   Make your minimum payments.  The only thing worse, not making a payment at all.

Face it they system is rigged.  The system is designed to make it easy as possible for you to make a nominal payment "just this once".   And when that happens, you are  are paying the maximum amount of interest to the bank or card issuer.

Minimum payments generally go towards the interest charge, and perhaps a minuscule amount actually goes towards paying off the principal.

Pay off the most you possibly can.  Sometimes if you just work on one card, and pay the most you can, and once that one is taken care or, focus on the next.  When faced with the "I have to make just a minimum payment this month" syndrome, ask if you could actually squeeze out even an extra $5.   Avoid the minimum payment as much as you possibly can.

6 Sure Fire Ways To Get Upside Down in Debt! - (Con't.)

1. Carrying too many credit cards.

This is your number one way of drowning in debt.

The joy of your first credit card, someone saying you are worthy, worthy to slap down a card and pay for lunch.  Then, when you dig yourself out of your first credit card, there's that thrill when the first credit cards agree to give you a card again.. for maybe a $300 limit.

These card people are not in the game to make you feel good - they charge amazing fees and huge interest rates.

Having more cards than you can keep track of leeds you to spending more than you should, and it makes it near impossible to budget and make payments!

A good Rule of Thumb is to have 3 cards, including store, gas, or specialty cards.  Just 3 - how's that for discipline!

Got More?   Take them out of your purse, or wallet, stuff 'em in a drawer, and STOP USING THEM!

Best to cancel them all together, but if you aren't going to do that, at least work on paying them off and not using them while they have an extended nap in your drawer.

Marcadis Singer PA

5104 South Westshore Blvd.

Tampa, Florida 33611

http://www.marcadislaw.com

(888) 547-1881 (813) 288-1881

Don't Fall Into More Debt Than You Can Handle!