Recent sets of data released by the Federal Reserve, the organization that track and records all monetary affairs in the USA reveal that Americans owe more than two trillion dollars on their credit cards and that the overall credit card debt for each individual in the country comes up to more than seven thousand dollars.

These astounding figures for credit card debt in the USA are bound to affect everyone. What then, you may ask, are the available solutions? You could start by following the suggestions given below which will help you effectively manage your financial liabilities:

Organize your outstanding debt – Begin by taking stock of each and every revolving obligation that you have. This would include all your credit and charge cards. Tabulate and record your liabilities based upon installment schedules, bills etc. Accounting for applicable interest rates calculate the exact amount that you owe.

It is important to know the interest rate on your monthly bills since it is the continuing cost you incur against an ongoing debt every month. So it is to your benefit if you can clear off the loan charging the steepest interest rate as early as you can.

So while making repayments try and send the maximum amount possible to the lender with the highest rate even if it means that you are left with making only the minimum due payments to the rest. In this manner, once the debt with the steepest interest has been repaid, you can follow the same policy for the loan with the next highest rate of interest.

Negotiate for lower interest rates – try and maintain an immaculate repayment history and then call or meet your lenders and request them to lower your rate of interest. Since it is costly for lenders to find new customers, if your credit worthiness is proven, they shall always try to retain you.

So, most lenders will allow customers in good standing to enjoy reduced rates. However, once they agree to reduce your rate, ensure that you pay your bills on time; failing which they could take back the facility and raise the applicable rate of interest once again.

Use cash when you can – Since it’s so much simpler to use a card in comparison to carrying cash or writing out checks, most of us get into the habit of using cards even if these attract charges. So try and cultivate the habit of writing out a check and paying with cash rather than instinctively using the credit card.

Always keep in mind that a credit card purchase is not a gift but a loan. So be well advised when you use the card: rather not use the card at all if you can’t afford the liability.

Remember it is better not spending at all rather than spending so much that it begins to hurt you.

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