Avoiding Future Credit Card Problems

Once you've decided to proceed with credit card debt consolidation, you will want to take some steps to organize your finances for the short and long term in order to avoid falling into the trap of overwhelming credit card debt again in the future.

1. Consider canceling some of your credit cards: Having a huge collection of credit cards for every mood situation, or ones that match whatever outfit you happen to be wearing may seem all fun, fine and dandy, but the temptation to use them is what got you in trouble in the first place. Consolidating your debt is not going to guarantee that you have changed to be immune to that temptation in the future, so you should seriously consider canceling some of your credit cards. Closing all but one or two of your credit card accounts and only keeping those with the lowest interest rates will do much to keep you from getting into trouble in the future.
2. Get on a budget: Unfortunately, far too many Americans have come to the point where they believe they are the federal government - no need to live within their means. This is part of what lead to the large financial crisis. Whereas the government can go without a budget for decades without suffering serious consequences, individual finances are rarely that forgiving, so a budget is required. Barring some sort of unforeseen emergency like a medical situation or job loss, a person who lives by a budget is a person who never gets into serious financial trouble. That's because when you are on a balanced budget, you keep track of all your income and outgo every single month and do not exceed your own boundaries, spending money that you do not have.
3. Pay you first: Saving money is almost a dirty phrase in today's society but it shouldn't be. As part of your new spending habits and budget, you should plan on building a savings account of at least 5-8 months of living expenses in a safe savings account that you can access should the need arise. Having this peace of mind will mean much to your financial security and mental peace. Set your budget up in such a way that you automatically have at least 10% of your weekly or bi-weekly pay deposited into a separated account that you do not touch.
4. If you use it, pay it off: If you do find a reason to use your credit card rather than paying cash for something, then resolve within yourself to pay off that credit card when the next bill arrives. Not the minimum payment - 100% of the balance due. This attitude and action, if followed-through on, will virtually guarantee that you never fall into severe credit card debt again.
5. Stay on time: It cannot be over-emphasized how important it is that you pay off your credit card bills every month on time. Being late -even once- only gives the credit card company the option of raising your interest rate, lowering your balance, or even canceling your credit card altogether. In addition to these punitive steps, a credit card company also may notify the credit reporting agencies that you were late in making your payments, which will negatively affect your credit score and hurt your chances of getting credit in the future.