You know what a merry-go-round or carousel is. It’s a carnival or amusement park ride that goes around and around but never gets anywhere. Unfortunately, credit card debt can be like that. You can go around and around with your credit card debt but never make any real progress.
The credit card trap
Credit cards can trap you because there are so many available with so many different perks and rewards and because they are so easy to use. You see that latest smart phone at Best Buy, Wal-Mart, Radio Shack or wherever and you don’t have $199 to spare so you just plunk down one of your credit cards. If you do this often enough and you don’t pay off your balances when your statements arrive, you can be caught up in the credit card merry-go-round. And getting off it can be a lot more painful than getting on.
You could be in debt forever
Has it occurred to you that you could be in debt to one or more credit cards forever? It’s what can happen if you’re only making the minimum payments each month. If this is what you’re doing, you need to gather together your credit card statements and compare your minimum monthly payments with your interest charges. If you find that the minimum monthly payments are only enough to cover the interest charges, you will be in debt forever. This is because the minimum monthly payment is paying only for the interest you’re being charged and is doing nothing to reduce your balances. I saw one story recently about a couple that was paying only the minimum monthly payments on their credit cards and learned that as a result, they would be in debt for 28-1/2 years.
Transfer your balances
One way to get off the credit card merry-go-round is to transfer all of your high-interest credit card debt to one with a lower interest rate. Many of the credit card companies are now promoting what are called 0% interest balance transfer cards. If you can qualify for one of these cards, you could transfer your other credit card debt to the new one and pay no interest for 6 to 18 months. This means that everything you pay each month during these months will go towards paying down your balance, which would help you get out of debt.
It pays to be wary
Before you sign up for one of these offers, make sure you understand how much interest you’ll be paying when the promotional period ends. You might find that your interest rate will escalate to 20% or even higher, which could put you right back to where you were before you made the balance transfer. You need to also make sure you’re not transferring your credit card debt to a more expensive premium or rewards card, which could have a very high annual fee and a higher interest rate than whatever you’re now paying.
No new purchases
If you decide to do a transfer balance, you will need to make sure that you don’t put any new charges on that card until you have either paid off all or the biggest percentage of your debt. If you don’t have enough self-discipline to do this, the odds are large that you’ll end up right back on the credit card merry-go-round.
Consolidate that debt
Depending on your circumstances, it might be better for you to consolidate your debts instead of doing a balance transfer. Our debt consolidation providers are so sure they can help you become debt free in a reasonable amount of time that we offer a simple 100% satisfaction guarantee.
National Debt Relief helps people nationwide resolve $10k or more in unsecured debt. Our debt coaches negotiate with creditors on your behalf so that you pay a fraction of what you owe and can become debt free in as little as 24-48 months.
