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- If you want something, save for it and then buy it. You should only finance items that are absolute necessities (home and car). Don't finance furniture, small appliances or vacations. If you can't afford to pay cash for it--you can't afford it.
- Use cash as much as possible. Paying with cash has a more significant psychological impact than plastic. It feels like you're spending more money so you spend less.
- Don't consider debt consolidation or consumer credit counseling agencies your first stop. These should be a last resort! Although they may be tempting, if you're going to get your act together, doing it on your own will help you learn the skills you need to fix your own problem and avoid getting in this situation again.
- You are allowed a free credit report from each of the three companies every 12 months through AnnualCreditReport.com.
- Realize that Credit Card companies are not your friend. They want you to remain in debt paying a minimum payment on their credit cards every month for the rest of your life. (They list your credit card payments to them as one of their assets.) So you should pay off your debt to each of them and then after waiting a couple of months (without using their card again) seriously consider closing that account. It is much more to your advantage to use a debit card issued by your checking account's bank. That way you can still use the convenience of "plastic" for purchases, but the money is deducted from your checking account and you avoid any more debt. And by closing your credit card account a couple of months after paying it off, you'll keep a good listing on your credit report for it.
