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Escaping the burden of credit card debt

Commentary by Master Sgt. Jeffrey T. Sanner

Let's face it: Credit card debt is a heavy burden to carry. Current statistics report that American credit card debt is $785 billion, or an average of about $7,500 per household.

Yes, credit cards are convenient. There is nothing wrong with maintaining a credit card for emergency purposes or the occasional large purchase. The problem arises when we misuse credit cards, using them as a supplement to our income.

When this happens, and debt accumulates, the stress produced can take a toll on our personal relationships, our peace of mind and, even our health.

When Air Force Materiel Command introduced its Wellness and Safety Campaign last spring, a Web-based wellness survey tool debuted as well. AFMC leadership is using the anonymous, voluntary survey to get feedback on issues related to the wellness and safety of its work force. Question 10 asked survey takers to identify their immediate credit card debt.

A good rule to follow when looking to purchase anything is that if you don't know when or how you will pay for an item, then you probably can't afford the item therefore shouldn't "charge it."

That's good advice, you say. But what if you are already over your head in debt, or you just want to knock out some balances you have been carrying? Here are some tips that can help you:

1. Stop spending. The first step is to reduce your use and dependence on credit cards. Cut up all but one card with the best terms. You can't use a credit card that is maxed out anyway, and you will reduce the temptation to use it again once it is paid off. An interesting piece of advice I read was to freeze the card in a cup of water. This will reduce your access to it, and create a barrier to using it for convenience.

2. Get on a budget. You need to know where your money is going before you know how much you can pay toward your cards. This will also ensure that your mandatory bills, i.e. food, housing, car, etc., are paid first.

3. Establish an emergency fund. Establishing $500 to $1,000 in savings will provide a safety net for life's little emergencies, and will avoid adding to your credit card balances.

4. Find the hidden money. If you are honest about your expenditures you probably have some luxuries you could live without. Luxuries such as premium cable/satellite, internet and cell phone packages are not necessary for survival.

5. Pay your highest-dollar cards, first. List each of your credit cards, their interest rates, and their minimum payments. Pay the minimum balance on the lower interest cards, and then pay the maximum you can afford to the highest interest card. This process is called laddering.

6. Make two payments a month. Each payday send a payment to the highest rate credit card company. This pays down the principal faster, and is equal to an extra month's payment over the course of a year.

7. Consider finding extra income. A part-time job can help accelerate your debt repayment. Even just a few hours a week can provide a boost.

8. Seek help. We go to the doctor when we are sick, so, if your finances are suffering then get some help. Your base Airman and Family Readiness Centers have certified financial counselors on staff ready and willing to help you. Their only goals are to help you, and ensure your readiness to support the Air Force mission.

You can do this! You have the power to make wise choices and be financially free. It will require discipline, as well as willingness to examine and change spending habits. The good news is that regardless of where you are at, you can chart a course to be free from credit card debt.

Source: U.S. Air Force

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