Credit Cards Are Handy, But Take Care In Handling New Reports Indicate Plastic Users Losing Control Of Debt

There’s no doubt about it. Credit cards are a wonderful thing - most of the time.

When you’re on the road, they can be essential.

In emergencies, they can be a lifesaver.

But, sooner or later, you have to come up with the money to pay for your purchases or cash advances.

Unfortunately, according to a number of recent reports, more and more people are not only unable to pay off their debts, they can’t or aren’t even making the minimum monthly payments.

In fact, earlier this month the American Bankers Association (ABA) reported that credit card delinquencies climbed to a 10-year high in the fourth quarter last year. The ABA said 3.34 percent of loan accounts were 30 days past due.

At the same time, the ABA reported that consumer installment credit expanded at a 12 percent seasonally adjusted annual rate. And the Mortgage Bankers Association says that residential mortgage delinquencies are up for the third consecutive quarter.

So it was’nt too surprising to see a report Wednesday from CDB Infotek of Santa Ana that said people who filed for bankruptcy last year were deeper in debt than they were the year before.

While credit card debt isn’t the only factor that leads to a bankruptcy filing, it is significant and it’s an area that can be addressed immediately. To get back on track, financial planners recommend cutting back on the number of credit cards you carry.

Most of the experts advise paying off the credit cards with the highest interest rates first and if the rates are equal, pay off the card with the lowest balance. Once you see that you’re able to pay off one card completely, it will give you encouragement to pay off another and another.

On the other cards, make at least the minimum payment to avoid extra charges.

Before you change credit card issuers for lower rates, call your current issuer and tell them that you’re planning to switch unless you get a lower rate. Some companies will accommodate you.

Finally: Always make your payment as soon as you receive the bill, thus reducing the balance used to calculate the finance charge.