Frugal Tips

Frugal tips for all. Simple ways to save and earn.

Reducing credit debt is one of the biggest concerns of many American families. As a nation, Americans have one trillion dollars just in credit card debt.

If you are reading this article, you probably are in debt as well and want to do something about it. You have to be very careful not to make mistakes which many people make while reducing their credit debt.

First of all, you have to have the right attitude. While it may seem obvious, there are many people who can’t get out of debt just because they fail to adjust their attitude. Living above your means is a very bad idea even if “everyone else seem to be doing it”.

Debt IS a big deal and if you think you can keep borrowing money, then file for bankruptcy and live happily again, you are mistaken.
Filing for bankruptcy is the worst thing you can do to your credit history. It will take you years to recover and it will be almost impossible for you to get a mortgage or a loan for a very long time. Also, remember that bankruptcy is not going to take care of all of your debts, so you are not going to become debt-free just because you filled some papers.

Another big mistake that many people are making is paying the minimum amounts on their credit cards. This is not going to help you get rid of your credit debt any time soon (unless you owe only a couple of hundred dollars). Even if you stop using your credit cards and concentrate on paying them off, you will still pay lots of extra money just because of paying the interest and it will take you years to become debt-free.

Avoid credit counselors or debt consolidation companies who charge you too much or who are asking you to pay up front. Many people think that if they pay someone to help them get out of debt, it will eliminate their debt much faster. Unfortunately, this is almost never the case.

Another big mistake that people are making is not negotiating their interest rates with their credit card companies. Every year many people lose thousands of dollars just because they don’t know that their interest rates are negotiable. Give your credit company a call and tell them that if they don’t lower your interest rate, you will pay your balance in full and close the account. It works in many cases.

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