Credit Card Addiction - Are You an Addict

Have you ever purchased something on your credit card that you would not have bought if you had to pay cash?

Are most of your credit cards over-limit?

Do you use one credit card to pay out another?

Are you always on the look out for a new credit card?

Do you believe that you can stop buying anytime you choose?

The latest figures from the Australian Prudential Regulation Authority show that Australians carry in excess of $32 billion in credit card debt.

How do you know if your behaviour is a sign of true addiction? Many people are in denial, they joke about having a shopping addiction but find that in the Western world, it is as acceptable as addiction to coffee. You may call yourself a shopaholic, but you probably do not consider yourself to be an addict with a serious problem.

Consumerism is king.

Essentially, addictive behaviour is one that we engage in for an immediate gratification. Shopping using the credit card can give an instant buzz, the feeling of getting something for nothing.

The problem of credit card addiction is more prevalent amongst young people. The ease of availability of credit, makes items out of reach, available here and now. Many Aussies have no idea what it feels like to pay their cards out within the interest free period. It all seems innocent enough, but before you know it there are thousands of dollars of outstanding debts that could take many years to pay off.

Establish a step-by-step action plan.

As with any addiction, the first step towards recovery is to acknowledge there's a problem.

The next step is to assess the size of the problem and put a money-saving plan into action. Work out a sensible budget including all the repayments you currently have to make. Some credit card providers have reduced interest offers on credit card balance transfer. These can help with managing outstanding debt.

Interest free offers are a great idea but require strict discipline. There's no point making the shift if you're only going to use the time to put more on the card. Instead, leave the card at home and concentrate on paying off as big a chunk of the debt as you possibly can. Some people will simply transfer the balance to another interest-free card at the end of the honeymoon period and continue.

In some cases it may be possible to consolidate outstanding credit card debt into a single loan. Then you can simply destroy your credit cards. It is a good idea to do this as it prevents you from building up additional debt.

If you do not qualify for a debt consolidation loan you may be able to include outstanding debts into your mortgage. This is a fantastic option as you then get to pay home loan interest rate on your unsecured debts.

If you are not a home-owner and already have a damaged credit history, a Debt Agreement may be your only option. It allows you to negotiate a lower payout figure with your creditors, hence reducing your repayment obligations.

Of course, none of these measures will do the least bit of good if you continue to use your credit cards. And, as addicts of any substance from drugs to love to sex will tell you, the 'just say no' technique doesn't really cut it.

Whichever way you choose to rehabilitate your dependency, be proud of the fact that you've recognised your problem and you're taking steps to fix it.

Don't expect miracles as a getting your addiction under control may take time.
Maya Pavlovski holds a Bachelor of Commerce Degree from Melbourne University and is a qualified CPA For more articles written by Maya Pavlovski please visit http://www.debtconsolidationaustralia.com.au or http://www.webdeal.com.au

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