Managing your finances is the best way to stay out of credit card debt. You can do this by setting your monthly budget plan and sticking to it. You have to ask yourself: Am I earning enough to support the lifestyle that I want for myself and my family? Obviously, there is an adjustment to be made when expenses exceed monthly income, and this is something that a lot of Americans need to realize.

With this in mind, it is fairly easy to avoid accumulating card debt. Unfortunately, a lot of credit card holders resort to solutions that are considered worse than the debt itself. Recover from debt but steer clear of the following solutions that are only meant to “solve” the problem temporarily:

1.    Cash Advances. When you take out cash from your credit card to pay off another account’s dues, then you are being counter-productive. It is common knowledge that cash advances yield higher interest rates than regular charge.
2.    Payday Loans. This is like spending money that you have not yet officially earned and a major budget buster. Desperation for money kicks off this very hard to break habit. When you find yourself borrowing against your paycheck, and later extend it will put you into a deep debt hole, additionally considering that this type of loan charges exorbitant interest rates. Avail of this only when you are certain that you can pay it off before maturity.
3.    Retirement Savings. Touching your 401K to pay off card debt is generally also not a good idea. When you withdraw from your 401K, you will be immediately subjected to tax and penalties, making your withdrawal lesser than the amount you anticipate. Furthermore, you will be required to repay the balance in five years or you have to pay in full in case you get fired from work.

Again, proper household budgeting is the best way to pay off credit card debt. If you can shift it in such a way that you are able to pay more than the minimum required amount, then that is better. By doing so, you are also building strong repayment history in your credit report.

If you also know that you cannot possibly pay off the balances within six months, consider applying for another card where you can transfer the balance without the interest. Just remember that 0% interest rates are just introductory prices so you need to totally pay-off everything before that period ends. Do not end up earning more debt because you simple overlooked a payment.

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