If you've fallen into credit card debt, only you know precisely how you got there and what it will take to get you out. Most cities in the U.S. have debt-counseling agencies that will lay out a debt-reduction plan and negotiate a repayment schedule with lenders. Often, these services collect a percentage of the repayment from the lender and charge clients little or nothing in fees.
But if such agencies are unavailable or you want to go it alone, here are some tips that can help you live (wisely) with your credit cards.
Cut up all but one of your cards.
There are 1.4 billion credit cards in circulation today in the U.S., or five for every man, woman, and child, reports Robert McKinley, president of Card Trak, a credit research firm. No wonder your wallet keeps breaking and your purse strap is wearing a groove into your shoulder! Cut up and cancel all those specialty credit cards that only work in one store -- after all, once you get that 10 percent off your first order, what does a card do for you? Keep one card -- your lowest-rate one -- for emergencies.
Follow your money -- within reason.
Do you really need to track every dime you spend on shoelaces and chewing gum? Not if you're living comfortably on your income and also saving for the future. Besides, "Budgets won't make you rich any more than tracking calories will make you thin," says Jay Heinrichs, former editor of Yankee magazine and author of The Yankee Way to Simplify Your Life (Simon & Schuster, 1994). Instead of a budget, Heinrich recommends that once each quarter you look over your check register and credit card statements. If you're spending too much on take-out meals, kids' software, or shoes, you'll see it.