Get Off The Credit Card Roller Coaster
By Meredith Hirons

Remember your New Year’s resolution? Not the one about losing weight, the one about finances.

You resolved to save more this year and only use your credit cards in an emergency.

Then your favorite department store had that great half-price sale and your resolve disappeared.

You are in good company. The American Banker’s Association says consumers have racked up $1.2 trillion in installment credit, up 50% from four years ago. That’s nearly $4,000 of high interest-debt for the average credit card holder.

Credit card debt is just like a roller coaster ride. You get a great feeling after you made your purchase and you are on top of the hill.

But as debt accumulates faster and faster, you get that sick feeling in the pit of your stomach as you reach the bottom of the roller coaster and get the bill.

It’s time to get off the roller coaster before you reach the bottom! No matter how good the sale, if you are financing your purchase with a credit card, it is not a sale!

Stop using credit cards! Cut up all your cards except one with a low credit line of $500 to $1,000 that you can use in an emergency.

Pay off the credit cards with the highest interest rates first.

If you have multiple credit cards, transfer the balances to a card with a lower interest rate. But beware -- many low interest rate cards have low rates only for an introductory period — note when the rate increases and pay your balance off in full by that date. READ THE FINE PRINT!

Some cards count balance transfers as cash advances and charge an extra fee.

Once you have eliminated the balance on a credit card, immediately cancel your card. Don’t mess up your credit history with a lot of open credit accounts.

If your debt is really overwhelming, consider a home equity loan. The interest rate is lower than on credit cards and the interest is tax-deductible if you itemize.

If you pay your bills late, you’ll pay more. According to Consumer Action, banks made 74% more on late fees in 1998 than in 1995.

Banks that charged $7 in 1995 for a late payment are charging up to $29 now. After just one late payment, your introductory rate may switch to a rate as high as 21%, and it can take up to a year of timely payments before the credit card company reduces your rate again.

Just as the debt on your card accumulated from many little purchases, in the same way, you can pay down that debt.

Reduce your expenses so you can increase your credit card payment each month.

What does your lifestyle cost you?

• Those $2.50 cappuccinos every morning are costing $650 a year.
• Dinner for two at $40 each week is almost $2,100 a year.
• First run movies can cost up to $8.00 a ticket. Wait until the movie gets to video and watch from the comfort of your home.

As you add an extra $100 or $200 to your minimum credit card payment, you are reducing your debt and your interest charges.

Eliminating your credit card debt is hard work and requires great willpower, but the rewards are great as well.

Once you rid yourself of the pressure of monthly payments, you will be able to save more.

Get off the roller coaster of credit card debt and get on the smooth track to financial freedom!