Source: Money Talks (http://s.tt/12Wdb)
In this economy, Americans are up to their eybrows in debt. In fact, the average American household with at least one credit card has over $10,000 in credit-card debt, and the average interest rate runs in the mid- to high teens at any given time.
Some debt is good
Borrowing for a home or college usually makes good sense. Just make sure you don't borrow more than you can afford to pay back, and shop around for the best rates.
Some debt is bad
Don't use a credit card to pay for things you consume quickly, such as meals and vacations, if you can't afford to pay off your monthly bill in full in a month or two. There's no faster way to fall into debt. Instead, put aside some cash each month for these items so you can pay for them with cash when the time comes.
Controlling your debt is possible if you start by getting a handle on your spending.
Most people spend thousands of dollars without much thought to what they're buying. In order to get a handle on your spending you need to creat a BUDGET. Write down everything you spend for a month, cut back on things you don't need, and start saving the money left over or use it to reduce your debt more quickly.
Get your debt paid off!
Now that you have gotten a handle on your spending, it is time to get your debt paid off. The key to getting out of debt efficiently is first to pay down the balances of loans or credit cards that charge the most interest while paying at least the minimum due on all your other debt. Once the high-interest debt is paid down, tackle the next highest, and so on.
If you can't keep up with your payments or you have extremely high interest rates, you should consider a Debt Management or Debt Settlement program.
These programs will help you eliminate your debt quickly while saving you money!
Don't fall into the minimum trap
If you just pay the minimum due on credit-card bills, you'll barely cover the interest you owe. It will take you years to pay off your balance, and potentially you'll end up spending thousands of dollars more than the original amount you charged.
Watch where you borrow
It may be convenient to borrow against your home or your 401(k) to pay off debt, but it can be dangerous. You could lose your home or fall short of your investing goals at retirement.
Get help AS SOON AS you need it
If you have more debt than you can manage, get help before your debt is too far gone. There are reputable debt counseling agencies that may be able to consolidate your debt and assist you in better managing your finances.
