by Sean Bennett

Created on: January 06, 2010   Last Updated: May 24, 2010

Everyone wants to go on that special vacation, even though they can't afford it. Or, buy that new television with HD Blu-Ray player and PS3They can't afford it out of pocket, but hey, that's what credit cards are for! 

Some people can amass a mountain of credit card debt in a short time and bury themselves so deep, not even realizing it before it's too late.  With monthly finance charges, interest rates near 26%, they could make a minimum payment thinking that's all they need, not knowing that carrying a balance from month to month keeps the finance charges coming. What could start off as $2000 of credit card debt, could end up being upwards of around $4000 by the time they would get it paid off.

Credit cards are a useful tool in developing a credit history.  ust as long as you are responsible with them and don't bury yourself. If so, buying a car, applying for a mortgage, or even buying a new cellphone can be affected. No one wants your business if they know for a fact there is no way you can afford it. That's way too much risk for them. 

Forget about buying a house and accept the fact you may live in Mom's basement until you can relieve some of your debt. Your FICO score is based on your debt to income ratio. If you're making $30,000 a year, have a car payment, rent, car insurance, five maxed out credit cards and other living expenses, your chances of having any money in savings are slim. 

One way to help is pick the credit card with the highest interest rate and pay a bit more toward that than the others. The finance charge coupled with the higher interest is eating away at your money and you won't be making any progress. If you have time, call each credit lender and ask about any special offers for lower interest rates or any special payment programs. Yes, these companies do want you to pay off your debt and are willing to help you. They're not out to take your money because it was their money you spent to begin with. 

If none of them are offering any special offers, keep your eye out for the mail for any other credit card companies who may be offering limited 0% interest for an amount of time to either open a new account completely or open an account with them by transferring a balance from another card. You could easily take the alotted amount of time for the offer and pay a significant amount down with a much no interest rate, or a much lower one. Even once the limited offer is over, you may still continue with that card at a much lower rate than you originally had. This can still help you in the long run. 

Bottom line though, look at the back of each of your credit card statements and read the find print! Some have stipulations that even if you were to call and cancel the card, for each month the account still carries a balance, there could be an additional fee built in, usually only a few bucks, but over a year could be an extra $20-$30 paid out. 

A good idea would be to break down your monthly expenses and see what you can cut out in order to put it toward your credit cards.  Every extra dollar counts and will help out, even if it doesn't look like it right away.

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