Breaking the Habit: How to Stop Using Your Credit Card

Breaking the Habit: How to Stop Using Your Credit Card

You know your debt is rising, but still cannot stop
using your credit card for purchasing items. Several
people get easily dependent on credit cards for
everyday expenses and impulsive buys. The fact that
you are borrowing money from the creditor for your
purchase might be tempting, but the truth is: you must
be able to pay it off on time. Neglecting those bills
can cause headaches in the future. You might get
malicious letters from your creditors, or even receive
threatening telephone calls.

Close, Shred and Leave

If you really want to avoid those from happening all
together or if you are starting to drown in your debt,
you have to stop credit card usage. Fortunately, there
are several ways on how to.

Firstly, many people would agree that closing your
credit card account is the best way possible. One and
simple call to your cardholder is sufficient enough to
inactivate your credit card. Doing so might even quiet
down that nagging feeling and desire to purchase items
using a credit card. Just think that there might be
one situation wherein the clerk says your credit card
has been denied; the embarrassment from that situation
is reason enough for you to inactivate your credit
card.

Shredding is also an excellent way to break the habit
completely. You can use an office shredder since it
works great on plastic as it does on paper. Since your
credit card is shredded into pieces, there is no way
that you can swipe it. However, if you do not have a
shredder, scissors are great too. Just cut the card
into small pieces and make sure that the credit card
number cannot be identified by potential thieves.

Another excellent way to stop using the credit card,
especially when you go out of the house, is to leave
them. If closing or shredding is not your style, try
taking your credit card out of your wallet when you
are about to go shopping. In this way, if you have the
urge to buy something you really do not need, you have
to think twice before buying it since you are about to
use your own money.

The Shock and What Your Can Do About It

You have been using your credit card for your expenses
but have you ever thought about the total amount of
cash you spend in interest alone each year? More so,
the duration of time it will take you to just pay off
your credit cards might shock you. It is all about the
numbers and these will put you into shock and can make
you think twice before using that credit card again.

For instance, if you have a balance of $1,000 and an
interest rate of 14%, it will take you about four and
a half years before you can pay it off; that is, if
you are making $25 in payments every month. By the
time you pay off the balance, you will have paid a
total of $347.55 in interest.

Since you know what credit cards can do, you might
want to stop using it once and for all. Learn how to
say "no" since this kind of discipline can help you
stop impulsive buys, thus stopping the use of credit
cards. Always think twice about swiping that credit
card for your purchases and you would not have to
think about repairing your credit in the future.

Avoiding the Scam

Avoiding the Scam

In the issue of repairing your credit, it is best to
do it yourself. Most often, you may hear or see
advertisements claiming outstanding credit repair
services offering you "legal" and "guaranteed"
solutions for your credit problems. These services may
use mottos that are quite enticing to those who are in
dire need of credit repair. There are even others who
get easily convinced after reading "authentic"
testimonials from several customers, who might not
actually exist.

When you are really in need of credit repair, the
first thing you want to do is to act immediately. You
should remember that this action should be done by you
and not anyone else. Luckily, there are several
factors that can help you avoid scam credit repair
services.

The Fraudulence

Day after day, several companies appeal to consumers
who have awful credit histories. Often, they promise
to tidy up credit reports, for a price, to help
consumers loan a car, mortgage a home, or even get a
job. The horrible fact is they cannot deliver; you
should keep this in mind especially if you do not want
to worsen your debt. These companies would only take
the cost of the services with them and vanish into
thin air.

The Signs of a Scam

If you had responded to a credit repair service, there
are warning signs that can help you determine an
authentic credit repair offer from a fraud. Firstly,
be aware of companies that wish for you to pay the
cost of the repair before providing any services. In
addition, avoid those companies that do not divulge
any possible legal rights you are entitled to and what
processes you can do yourself without payment.

There are companies that advise consumers to directly
contact a credit reporting agency - you should avoid
such companies. More so, if the company you have
responded to suggests that you to create a new credit
identity and then make a new credit report by applying
for an Employer Identification Number to use rather
than you SSN, you should immediately stop contacting
that company.

Lastly, those that advise you to argue all information
included within your credit report or take actions
that may seem illegal, i.e. generating a new credit
identity, should be avoided.

Remember that you could be prosecuted for wire or mail
fraud if you use the telephone or mail to apply for
credit and give information that are not authentic.
Lying on a credit application, misinterpreting your
SSN and acquiring an Employer Identification Number
from the IRS under false pretenses are all federal
crimes.

Most importantly, you should remember that included
within the Credit Repair Organization Act is the rule
that credit repair companies should not require you to
pay until the services they have promised are
complete.

The best possible way to avoid poor credit history,
and totally keep you safe from fraudulent credit
repair services, is to do a periodic credit report
review. Reviewing your credit report is important
because the information in your report affects your
chances of getting an insurance or loan. Make sure
that the information is correct, complete and
regularly updated before applying for a loan. Lastly,
by doing periodic check-up on your credit report, you
can be safe from identity theft, which can create a
major problem not only in your credit report.