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Addicted to Credit? Debt Consolidation and Breaking the Cycle

Charles Kemp
 


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Credit is offered to us from every angle with the silken promise that “Of course you can afford it - we have a credit program" and like fools we get sucked in over and over again. Credit is offered to us every day and presented as an easy manageable option to make a purchase. In reality it should come with a mile high warning label saying beware, use with care, consult an accountant before use.

Quite simply credit is a trap, but it's a cunning trap that makes the merchant money even if you do make all payments on time. And like a curious mouse we sneak up to the trap and nibble the cheese. That was relatively painless so we go back for a bigger bite next time. And then bigger, and then bigger. . . and you know what happens to a mouse that keeps going back to a mousetrap. . . eventually the trap goes off.

There are two types of people who get caught in the credit trap. First there's the type of person who simply doesn't care. If someone offers them free money they will take it and to heck with the consequences. Consequences are something that happens next year, or the year after and in the mean time they have this flashy new sports car. The second type of person who gets trapped by the credit cycle is one who overreaches their means to repay debt. Perhaps there were extenuating circumstances such as a job loss or a pay cut, but they get caught in the trap and cannot make a payment.

One missed payment is the beginning, because when you start missing payments you start getting hit with late payment charges, and extra interest penalties - and it all starts going very badly. This is where you need to break the cycle. Don't bounce one payment onto another credit card, or put it off and hope it goes away.debt payments DON'T go away unless you pay them.

The first step to recovery from addiction is admitting there is a problem, so do this today - admit there is a problem and start planning the solution. That's going to start with a serious look at your budget. How much do you have coming in? How much do you have to pay for rent, food and necessities. After that - everything should be going to servicing your debts.

And how about the debts themselves? If you have some high interest debts, perhaps it's worth looking at a good debt consolidation loan that will roll all your debts up into one, easy to pay, loan. Just make sure you know all the facts before you make a debt consolidation move. Transferring from a high interest loan to a low interest one sounds like common sense right? But what if the benefit is lost by early payment penalties(yes they do exist - the lenders WANT you paying high interest for years - that's how they make money).

Get all the facts about your debts. Then learn all your options for paying them. Then decide what the best way forward is. But do not delay, because if your debts seem large now you can guarantee they will appear larger and scarier in 12 months if you fail to build a solid plan to deal with them.

If you need real advise about fighting your debt and learning the options that are open to you - visit The Creditors Debt website for free advise from a range of specialists on credit repair, debt consolidation, Loans and Personal Finance.

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