Consumer Credit Card Debt: Be Your Own Debt Planner
Ah, the appeal of credit! New employees jump at the chance of owning their first credit card because it affords them the luxury of buying now and paying later. However, the “later” clause becomes stretched so that later becomes much later or probably, never.
Plastic spending means worrying about your purchases at a much later date, and justifying this strategy by saying that you will earn the money spent in the future anyway. ideally, you pay with credit for your purchase now because you don’t have cash, and when the day of payment comes, you will have the cash that you lacked before. It doesn’t always turn out that way, as other bills come along, and these too require attention and priority.
Some people see debt accumulated via plastic spending as a necessity of daily living. The notion of having a lifeline when you have nowhere to turn to for immediate cash need is well and good, but people must remember that something borrowed cannot be truly yours unless you pay on time and pay as much of the debt as possible.
Credit cards have become a necessity and there are ways to use debt wisely. One way of doing this is by strategic spending. Before getting one of these convenient plastic lifelines, make plans on what you intend to buy with it… and stick with that plan. For example, you commit to using the card only for extreme basics like food, clothing and home. Then, you list the details of these basics i.e. how much is your fixed mortgage payment, how much will you likely spend for food, how often you will shop for clothes every month and how often will you go shopping for ONE clothing item every month.
If you stick to your plan, and moderate your spending in such a way that you do not pay for other luxuries using your credit, you will have a clear picture of how much you are likely to pay back every month, and whether you can afford that amount or not.
You can haggle with your budget, make allowances and such during the initial planning stages, but the most important thing to do is… stick to the plan!
