Breaking the cycle of credit card debt

Excess credit card debt - whether it stems from an unexpected illness, job loss, getting laid off from work or from an unforeseen expense like auto or home repairs - is one of the main reasons people file for bankruptcy. Most people assume that once they file for bankruptcy they will never use another credit card again. That isn't always the case, but it might be a good idea for those who are already struggling with debt.

Changing your mindset

If you are struggling with overwhelming debt to the point that you have considered bankruptcy, you realize that you have a problem. Whether a Chapter 7 or Chapter 13 bankruptcy is the best solution for you or another debt management solution is a better fit is something that should be decided with the help of a skilled bankruptcy attorney who has the in-depth knowledge of the pros and cons of a variety of financial solutions.

Choosing not to seek bankruptcy protection because a filing will curtail the use of credit cards is rarely the right choice. Overdependence on credit cards causes a host of problems, only one of which is the likelihood of future debt.

Even if a bankruptcy filing isn't the answer, debt management experts recommend living without credit cards, at least until debt has been paid off. Most people nowadays have several credit cards that they whip out for every purchase. That mindset leads to mindless, excessive spending, and without a change, debt will start creeping up again.

Making the shift away from a credit card lifestyle might be tough at first, but the rewards are more than worth it. Most people don't realize they have been living beyond their means until they put away the credit cards. It can be tough to go "cold turkey," but once the cord has been cut, and changes start, the seeds for a fresh financial start have been sown.

A blueprint for change

While it is true that credit cards are convenient, debit cards offer many of the same benefits, but come with a pre-set spending limit: you can't use the card beyond the limit of whatever account (checking or savings) the card pulls from. The built-in limitations of a debit card are perfect for those changing the way they spend. Debit cards offer mindful convenience because all purchases must be subtracted from the total of the account's funds.

Another way to reduce dependence on credit cards is to pay cash for purchases. Deducting cash from a checking or savings account offers a built-in spending limit. Many people find themselves spending less when they have to account for the cash required for purchases. This leads to better choices down the road and a more responsible financial future as purchases require premeditation and planning to ensure that funds will be available.

Instead of keeping a credit card for "emergencies," most people can function quite well by building up a safety net in the version of a savings account or back-up checking account only accessed when necessary.

If you are interested in learning more about debt management options like a bankruptcy filing, or how to best repair your credit after a period of difficulty, seek the advice of an experienced bankruptcy attorney in your area.