Student Loan Dodgers

Unfortunately, credit card debt is a reality for most American families. According to the Credit Counseling Service, the average family in 2005 had more than $9,000 in credit card debt, an amount that more than doubled from 1995.

If you’re like most college students, you begin accumulating debt while in school and carry that forward after graduation. It’s of little comfort to say that the best way to avoid debt is not to get into it in the first place, but that’s a little bit of salt that’s worth remembering.

If you have credit card debt, the worst thing you can do is add to it. If you can, commit to putting away your credit cards for one, two or three months. Don’t use them at all, and during that time make a concerted effort to increase your payments. At the end of your “test period” see how much you’ve reduced your debt.

If you can’t go that long without using your credit cards, you’ve got a problem. Either you aren’t making enough to make ends meet, or your spending priorities are out of line with your budget. Take a look at each charge on your credit card statements. Realistically, did you need each item you purchased? An emergency car repair will look a lot different than a new handbag or weight set.

Don’t use your credit card for cash advances. You’ll quickly find out that you don’t need these high-interest loans. Not only do they rack up interest charges from the moment you get the cash, they also prevent your payments from reducing your principal until the cash advance debts are repaid.

Look at the interest rate you’re paying on your balance. Shop around and see if you can find a lower interest rate. Beware of “introductory rate” offers. They can go bad on you quickly if you make a late payment or accumulate additional charges during the grace period.

Ultimately, the only thing that will get you out of debt is responsible management of your money. Generally, if you avoid using your credit cards for purchases you couldn’t make with your cash-on-hand, you can avoid the high-interest revolving debt trap that many individuals and families find themselves in. On the other hand, if you can’t go a month without a “must-have” credit card purchase, you’re putting your financial future at risk. That’s something to think about when you go shopping.