How Much Credit Can
You Afford?
by Cindy S. Morus

Before making the decision to add more debt, you need to make sure that you:

Allocate sufficient money for your essentials.

Borrow only for items that you need and can afford.

Borrow only if you're spending less each month than you take home.

Start with your monthly take-home pay.
This is the amount you have left after taxes and other deductions have been made.

Subtract the amount you need for necessities and fixed expenses.
This includes savings, your mortgage or rent payment, utilities, food, transportation, child care, medical care, clothing, and recreation. Include payments made on a quarterly, semi-annual, or annual basis, such insurance and taxes.

Subtract monthly payments for existing loans and credit cards.

The balance is the amount you can safely apply to debt repayment.
Avoid thinking you can spend all this amount, since emergencies do occur, and you may not wish to use your regular savings account to cover small, unexpected expenses.

Monthly Take Home $ _______
Fixed Expenses $ ___________
Loans/Credit Cards $ ________
Amount Available For Additional Debt $ ________

HOW TO MANAGE CREDIT CARD USE
Many people find themselves with credit problems because they don't keep track of purchases they make with their credit cards. A simple method of keeping track of monthly credit card charges is to:

Determine the total amount you can responsibly charge on all your credit card accounts during that month.

Keep track of your credit spending in the same way you maintain a running balance of your checking account.

Subtract each amount charged from the monthly charge limit you set.

Stop using your credit cards if you draw this balance down to zero.

About the Author
(c) Phelps Creek Financial Coaching - All Rights Reserved
Cindy S. Morus (www.phelps-creek.com) is a Certified Financial Recovery Counselor specializing in showing women and their families how to achieve financial well-being and peace of mind. She is also a Certified Credit Report Reviewer and Get Clients NOW!™ licensee. Contact her at 541-387-2995 or cmorus@phelps-creek.com. She is also the publisher and editor of "Financial Fitness", an internet gazette dedicated to helping people improve their financial fitness no matter what decisions were made in the past.

Beating
  Credit
   Card
      Debt
                 by Ellise Walsh

Getting into debt is easy and getting out of debt is hard. That much is clear to everyone. The debt that took only days or weeks to accumulate can take years or even decades to get rid of. We've all heard the statistic that a small credit card balance can take 30 years to pay off if only the minimum payment is made each month. When one hears statistics like this, one is often tempted to despair and wonder if it is even possible to pay off such a crushing credit card debt.

The answer is that yes, credit card debt, even in the most severe cases, can be paid off and the individual involved can go on to a life of financial independence and stability. It does take some knowledge, some patience and some hard work, however. Knowledge of how the credit card industry works, the patience to stick to a strict payment and spending schedule, and hard work, possibly in the form of a second job, will be rewarded with the ability to put your credit card debt behind you.

Let's start with gathering some knowledge about how the credit card industry works. Banks that issue credit cards count on their cardholders not being able to pay their balance in full each month. From the low teaser rates to those cash advance checks, credit card companies want you to spend more than you earn. One of the secrets of the credit card industry is that they make a large proportion of their income from the finance charges, late payment fees and over limit charges assessed to their cardholders. You can use this knowledge to your advantage by contacting your credit card bank and asking for waiver of these charges and a lowering of your interest rates.

Credit card banks are often willing to work with their cardholders to enable them to pay off their debt. That is because if the cardholders are forced to declare bankruptcy, the banks know that it will be difficult if not impossible to recover the money they are owed. Use this fact to your advantage to negotiate friendlier repayment terms on your credit card debt.

Once you have negotiated a repayment schedule, however you will need the dedication and patience to stick to that schedule. If you miss a payment, or if you are late, the bank may call off the repayment schedule and demand their money. This can be very damaging to your credit rating as well as your finances. Be sure you the perseverance to follow through and hold up your end of the agreement.

You may want to consider taking on a second job as a way to retire your credit card debt faster. Many people, even if they are already very busy, find that a second income helps them eliminate their debt faster than any other strategy. Even if you think you don't have the time, researching job opportunities near your home may provide you with the extra income you need to get out from under your crushing credit card debt.

By using a combination of knowledge, patience and hard work, you can eliminate virtually any credit card debt and get yourself back on a solid financial footing.

About the Author
Delivering freedom from financial dificulties doesn't have to be an uphill struggle. Fill out your details at Debt Help and we will show you your real financial position and assist in making your debt managable and your life enjoyable again.