With the number of credit card offers that the average American home receives every year, and the fact that the average American is about $8000 in credit card debt, it is not difficult to see how quickly consumers can get deep into debt with credit cards. Although it’s not easy, there are some simple steps that can be taken to begin to decrease your credit card debt and to begin to gain control of your spending and finances once again.
To begin, look at the latest statement for each of your credit cards and check the balances on them. Then check the interest rate you are being charged by each of these cards. Some creditors can charge up to 21% or more in interest annually. If you find that you are carrying a balance on one or more of these high interest rate cards, and you are only paying the minimum required payment each month, it may take you years to pay the balance off. Not only that, but when the iniital balance is finally paid off, you will actually have paid many times the initial charges when you consider all of the interest paid during this time.
The next step you must take to avoid this scenerio is to consolidate your debt. If you are carrying a balance on a high interest rate card, begin looking for a card that offers a lower interest rate. If you are carrying balances on more than one card, look for a credit card that offers an introductory rate of 0% on balance transfers. Apply for one of these cards and transfer your existing balances to this new card. Now you have anywhere from 6-15 months (depending on the new card’s terms) to work on paying down your balance without worrying about added interest charges. However, be sure to ask about any transfer fees involved before opening one of these new credit card accounts.
The final key is to stop all unnecessary spending and increase the payments to your credit cards as much as possible. Above all else, avoid paying only the minimum required monthly payment. This is the worst thing you can do. Continue to pay off as much as possible every month while reducing your spending as much as possible and you will find your debt beginning to decline until you are finally out of credit card debt entirely.
Karyn Kudrna is owner of the website http://www.credit-123.com which offers information on low interest credit cards
When learning accounting for the first time, the terms ‘debit’ and ‘credit’ can be a bit confusing. Why? Because when you go to the bank and deposit money, the teller will tell you, “I am crediting your account X amount of dollars,” but if you are taking money our of your account, the teller will tell you, “I am debiting your account X amount of dollars.” Also, with debit machines all over the place, and credit cards in everyone’s pocket, the two accounting terms take on a whole new meaning.
However, what we’ve learned about these two words so important in the accounting world, debit and credit, have to be unlearned quickly. Why? Because in accounting, the term debit is used to describe a bank account and that money owed are actually credit accounts - the exact opposite of what we’ve been taught elsewhere.
In accounting terms, neither credits nor debits are ‘bad’, but they need to equal each other in order to balance themselves out in the end. Every itemized transaction, no matter if it’s a deposit or a bill to be paid has both a debit and credit posted in the accounting world. This is what is called ‘double-entry accounting’ - so when you go to the bank, and the teller says, “I am crediting your account X amount of dollars,” she is also debiting an entry of a similar amount without telling you this. The same goes for when the teller tells you, “I am debiting your account X amount of dollars,” - the accounting will show that a credit of the same amount is being made elsewhere at the same time.
The easiest way to figure out debits and credits in accounting terms is to figure out the following: what did you receive, and where did it come from. The debit is what you received, and the credit is where you received it from, in accounting terms. So for demonstration sake, let’s say you bought a CD with your credit card. The CD is what you got, so it will be a debit in the accounting world, and the credit will be applied to the liability you carry on your credit card for the exact same amount.
The bank can easily confuse people learning about credits and debits in the accounting sense of the words, especially when discussing liability. For instance, when you put money in the bank, the bank’s liability to you increases, and since liabilities are credits, they are crediting your account (in accounting terms). And when the bank lowers their liability to us (by us taking money out of the bank) the banks are debiting the liability account, from an accounting perspective.
Basically it comes down to being able to figure out what you got and where exactly it came from; if you can figure these out for every transaction, then you’ve got the accounting terms of credit and debit down pat.
For more more information about accounting please visit http://www.moneytipsdaily.com