Credit Card Debt Advice
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Credit card debt advice varies, depending on the source, and both good and bad counsel can be found from many places, including money management books, Web sites, and even from loan companies themselves. Even well-meaning friends and family are probably willing to dole out this advice. Although some people believe in never using credit cards, following that advice is unwise. If a person ever wants to apply for a car loan, a mortgage, rent a car, and even apply for a job in some cases, he needs to have a financial history. If a borrower has never established a history, bankers and employers are left to assume the worst--that that person is a poor financial and employment risk.
Sensible credit card debt advice is to use credit cards wisely. This means paying off the entire balance before the due date each month. Doing so keeps the borrower from paying interest charges or late fees and increases his credit score. People who follow this advice live within their means and never fret about owing money. Unfortunately, for many people, this credit card debt advice comes too late. Many recent college graduates, for example, find that they have racked up considerable indebtedness. Whether they used their credit cards for legitimate living expenses or spring break trips to Cancun, they tend to think, "When I get a good job, I'll pay off my loans." Reality, however, often tells a different story. Post-college desires (such as a professional wardrobe, a new car, new home furnishings, etc.) tend to increase the overall indebtedness in spite of an increased income. People in these and similar situations need to focus on the big picture of slowly eliminating their loans while changing their spending habits. The first step is to look seriously at income vs. expenses, being very careful to separate needs from wants. After meeting the monthly obligations (rent, utilities, groceries, etc.), any leftover funds should go to pay down the loan with the lowest balance while paying just the minimum on the others. Then, when that first card's balance is paid off, move on to paying off the next card.
Some people suggest consolidating all loans onto either one credit card with a lower interest rate or into a consolidation loan from a bank or other lending service. This could be good, provided the debtor changes his spending habits and doesn't create still more credit card debt. Although the assumption that loans are a necessity in today's society could be disputed, the fact that God expects us to use our money wisely cannot. He tells us, "Do not lay up for yourselves treasures on earth... but lay up for yourselves treasures in heaven. For where your treasure is, there your heart will be also" (Matthew 6:19-21). Seek credit card debt advice that honors Him.
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