Stop Sweet Smelling Credit Turn Into Stinking Debt

Friday, June 29, 2012, AM | Leave Comment

Once you get credit of any amount and for any purpose – the one you have wanted – it seems like you are on top of the world. There is no stopping what you can do with it. Credit always smells sweet. The only one in the whole world who can put it to work to increase your financial assets is none other than you and you alone. That would be very responsible if you did that.

However, many folks have been known to waste it as easily on dining out and entertainment of all sorts, especially credit that comes from using credit cards.

Credit entails not only using credit cards but student loans, mortgages, car loans and personal loans as well. So far as lenders are concerned, some credit is secured others are not.

According to The Christian Science Monitor (CS Monitor),

From around $15,000 in 2006 to a peak of $18,000, average credit card debt then plummeted to around $14,500 by the end of 2010 and hasn’t moved much since. Unfortunately, that’s not nearly as good as it sounds.

By the way…

CS Monitor says “average credit card debt” whereas SFGate.com, quoting CS Monitor, says “average American household”.

sfgate.com statement applies to me and millions others even though we pay credit card bills on time and in full every month whereas csmonitor.com statement does not.

On the outset, both statements seem to be the same but for folks who track these statistics there ought to be difference.

In my opinion, sfgate.com includes all the households in the nation whereas CS Monitor mentions only those who carry credit card debt.

What you can do if debt starts stinking bad…

Like I said, when you get credit, you are happy. But if you don’t manage it properly, it starts getting out of control. A time comes when you can’t even pay the minimum. That’s when it starts smelling stinking bad.

  • Immediately put a stop to getting more credit…

    Stop using credit card but don’t close the account. Closing it lowers your credit score by as much as 75 points. Credit card is one big reason for consumer debt.

  • Spend less than you make…

    Once you stop using credit cards, start spending less than you make. Start paying down debt with the money you save.

  • Create a budget…

    Create a budget and stick with it. It does not have to be elaborate. Just keep track of the money you spend. You already know what your income is. Cut down or totally eliminate unnecessary purchases. Buy what you need not buy what you wish for.

  • Change your lifestyle for better financial life…

    Change your mindset if it is fixed on spending. Change your lifestyle so you spend less, save more and pay down your debt.

  • Increase income, spend less…

    For many increasing income is hard but spending less is harder. There are two ways to pay down and eventually eliminate your debt.

    Either you increase your income or reduce your spending and pay down debt with the difference. Try hard to do one or the other.

    If you can manage to do both, you will pay off your debt sooner than you may have expected.

  • Bump up your saving…

    You can do all the above and still stash away some money for future. Save from every paycheck no matter how small the amount may be.

    By year end, you will have saved some amount that you would not have if you didn’t save.

  • The severest migraine headache of them all…

    If you miss three consecutive installments, your debt will be handed over to the collection agency who make such huge amounts of money that even big executive salaries and bonuses pale in comparison.

    The C-level executives and collection agencies both make money over the miseries of consumers. In many cases consumers have brought miseries on themselves.

    Stop filling other people’s already swollen bellies with more debt. Stop living miserable financial life.

In a Nutshell
Paying down debt and saving a little consistently will eventually better your financial life. This way your credit will smell sweet, but your debt will not stink.

When you get credit of any kind, start planning to repay it as soon as possible before you apply for another credit.

Don’t let your credit card or any kind of debt turn into the stinking debt you never intended to have.

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