Dont carry a balance on credit cards

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Surveys shows 50 percent of credit cardholders dont pay their bills in full or on time. More than 40 percent of credit cardholders say they dont know the interest rate on their cards. Suppose you carry a $1000 balance from month to month. That costs you $180 in interest a year if you have a credit card with no annual fee and an 18 percent interest rate. But many credit cards do have annual fees, especially the gold cards with the enticing travel rewards. Youll be astounded at what you pay once you factor in the fees.

Youre fooling yourself when you slice and dice your debt onto several credit cards. Better to have everything in one credit card, so you know exactly what you owe. Youll have an easier time monitoring your indebtedness and not letting it get out of control.

Here are some signs of credit card trouble:

1. Youre making only the minimum payments on your accounts.

2. Youre missing payments or due dates.

3. Youre near the credit limit on most of your cards.

3. Youre borrowing from one card to pay another.

4. You dont know how much you owe.

5.You worry a lot about money.

6. You use credit cards to meet your weekly or monthly living expenses.

7. You transfer balances from one low-rate card to another every few months, just before the introductory offer expires.

Its time to address your financial problems if you recognize some of these patterns in your own life. Heres a six-step program to help you get out of the trouble.

1. Be honest with yourself. Do a complete analysis of all your debts, the interest rates and terms.

2. Decide how much money you can use to pay off debt each month.

3. If there is a shortfall, consider getting a consolidation loan or line of credit at a lower rate.

4. Consider selling investments to pay off high-rate debt. If you own a house, bump up your mortgage at renewal time.

5. Pay the minimum amount on each card. Use whats left to pay off the card with the highest rate.

6. Dont use the cards any more. Cut them up or put them into a box.

Buying everything with cash, cheques or no-overdraft debit cards forces you to confront the fact you cant afford something. With a credit card, you can always afford it.