Simple Steps to Curbing Credit Overuse

There are literally a ton of different ways to help your family curb credit overuse. While this is not an all inclusive list, the list contains the basic steps that my family has used to basically stop using credit. We hope that this list can help to serve others. If you can additional tips to this list, please feel free to add them in the comments!

1) Getting the family on the same page. Talking with family members about reducing or eliminating credit use is the logical first step. All family members must be willing to reduce spending. Ultimately, your family may have to agree to stop using credit cards and/or be willing to close charge accounts. If your family has the means to pay credit or charge accounts in full each month, good job! However, for the majority of us out here, paying in full each month simply is not going to happen.

2) The deep freeze. Take all of your credit and charge cards out of your wallets and purses. Next, insert them into a Ziploc bag. Place this bag in the BOTTOM of your freezer. If you encounter a situation in which you absolutely MUST use your cards, they are still available. By freezing the cards, you are eliminating the vast majority of your impulse buying. For our family, this was an extremely difficult, but necessary step.

3) If you are behind on your payments, contact your creditors IMMEDIATELY. Do not put this off. In most cases, your creditors will be willing to work with you. In our situation, Home Depot, Chase and Household Savings Bank were willing to help us by allowing interest only payments for a quarter. On the other hand, Sallie Mae, Capital One and CFNA were horrible to work with. Not only were none of them willing to lend us a hand, they stepped up their collections activities. Oh well, for them When we called our creditors we gave them very specific, concrete facts: “My wife’s salary has been reduced by 25%. We are unable to meet our current bill structure, what can you do to help us?” Very simple two sentences and then HUSH. Any questions you are asked should be answerable with a simple yes or no. If they ask you what you feel you can afford to pay, if you state any amount, go very low while reminding them that there are “x number” of other creditors on your list. So what happens to the creditors that will not work with you? Remain sending them SOMETHING. Our Capital One minimum payment is $255. For four months, we sent them $10 per week. It was all we had left. Yes, it is screwing our credit, but at this point our credit is already screwed. We are currently still teetering right there at the edge of the precipice between making it and possible bankruptcy. We are still going to try every option available to get through this, but at this point it is a crap shoot as to where we eventually end up.

4) Do not ask for credit limit increases. If you are beginning to struggle, increasing your limit only adds to your misery. This method will only lead to long term disaster.

5) Do not use credit for consumable items. I know, we have all done it at one point, but it is a sure sign of impending disaster. Again, if you can pay your bill in full at the end of each month, then by all means go for it. When you charge a consumable item, it is long gone before the bill arrives. By only purchasing tangible items, at least there is something physical there to sell if worse comes to worse. In extreme cases, money is money.

6) Seek help from accredited services. For example, the CCCS is the only US Federal Government approved counseling service. Our family is currently at this point and we will be contacting them next week for a review.

Reducing credit and charge account use is the first obvious step in curbing overuse. After reducing use, seek help from your creditors. In most cases, your creditors will be willing to help you. After all, they want your money without you going bankrupt. Whatever you do, keep your head’s up. Do not allow credit overuse to destroy your family. If you can not make your bills, what will happen? Will you go to jail? Nope. The worst thing that can possibly happen to your family is a civil case is brought against you seeking a judgment and/or garnishment. Do not allow it to get this far. Stay on top of things and do not lose hope, your family can get through this!