The Downward Spiral of Credit
How do you avoid getting further and further into debt? Credit
cards can suck you in without you really realizing it - everyone
needs one, and they are great in emergencies. But often people
gradually let themselves get into more and more debt, until they
just can't pay any of it off.
The first thing you need to do is always pay more than the
minimum each month. If you just pay the minimum, you're mainly
paying interest - you're not getting rid of the debt that is at
the root of your problems. You need to find a way, even if it
means cutting back somewhere else. Set aside a certain amount of
money each month for paying down your debts, even if it's not a
lot. Next, you need to avoid robbing Peter to pay Paul. Don't
get more credit cards and then use them to pay the interest on
the others - this is how the cycle gets started. If you have to
pawn your furniture, then pawn your furniture, but don't keep
getting more and more credit cards - it just won't work in the
long run. Eventually, you're going to lose everything if you do
this - you can only sustain it so long, and after awhile you'll
be paying more and more in interest and you'll be less and less
able to get out of debt. Don't use "quick-fix" techniques either
- payday loans may get you money faster, but they are at an
absurd rate of interest, and they suck away money that could be
going towards improving your financial health.