If
you're like many Americans, your credit situation is sort of like a day at the
amusement park -- lots of ups and downs, thrills and chills, and the tendency
to overindulge and engage in risky behavior.
While
there's nothing wrong with enjoying the rides, it's important to keep your
hands and feet safely inside and buckle up for safety. It's the same deal with
using credit cards, as the following guidelines will explain ...
The roller coaster
Stay on track: If you don't have the money
to buy something with cash, take a moment to think before you spend on credit, says Kathleen Burns Kingsbury, wealth
psychology expert and founder of Massachusetts-based KBK Wealth Connection. Try
this: "Leave the store. If you still have a burning
desire to have the item the next day, then consider going back. Spending less
will ultimately make the ups and downs of credit card debt easier to stomach."
Another way to survive that debt corkscrew (without losing your
lunch) is to avoid trends, says Greg Meyer,
community relations manager for Meriwest Credit Union of San Jose, Calif. "Buying things
sometimes gives you a high. Take a look in your closets and think about all of
the things that you bought that are now sitting there because it went out of
style too quickly or is uncomfortable," he says. Learn from past spending
sprees, and be sure to keep your seatbelt (and wallet) fastened.
The carousel minimum payments on a large revolving credit
card balance.
Stop the cycle: new rules in place that show consumers on every billing statement just how long it will take to pay down a balance using only minimum
payments, the reality can be startling. "You
can't stay in denial about what that number looks like when it's staring at you
on your bill," says Kingsbury.
"Making larger payments gets you off that carousel, starts paying down
your debt and reduces the amount of interest you pay monthly to the 'Strong
Man' at the carnival, otherwise known as the credit card companies and banks," says
Meyer.
The freak show no-interest offer!
Don't get
duped:
The teacups
Enter
the no-spin zone:
While an nonprofit credit counselor or adviser can help you address your spending habits from a financial
standpoint, Kingsbury urges that you look at your spending from an emotional
perspective as well. Understanding what's really motivating your purchasing
decisions is the best way to bring your dizzying ride to a stop.
The concession stand
Portion control: credit cards ," says Kingsbury, "as opposed to the inner kid that runs up credit
card bills and ends up feeling sick when the statements come in." Rule of
thumb: It's better to use your credit card to help you buy one good purchase than
to buy many small ones that leave you feeling like an over-sugared kid with a
tummy ache. "When we
don't manage the financial and emotional aspects of credit, that's when it
becomes a problem."
