5 Surefire Ways To Eliminate Credit Card Debt
Do you have enormous credit card debt? You are certainly not alone. According to research, the average family in the United States has $7000 in credit card debt and pays about $1000 in interest each year! Throw in a late payment or two, or an over-the-limit charge, and that number skyrockets. Imagine what you could do with that $1000 if it weren't being spent on interest.
Let's imagine for a moment that you have $5000 debt on one credit card that is charging you 17.5% APR. Let's also imagine that you pay only the minimum due of $25/month on this card. Guess what? You will never pay it off! The interest alone on this card is $73/month!
That means that each month you get further and further into debt. By the time you have been paying on this $5000 for 10 years, assuming you have not used the card during this entire period of time, you will owe $20,385! That's over $15,000 in interest. If you triple your payment to $75, it will take you over 20 years.
So, what do you do? How do you get out of debt and use that money towards other necessities, savings, and investments? Here are a few simple methods that you can use without having to go to an expensive financial counselor.
Tip #1: Cut Up Your Cards
The very best way to reduce your credit card debt is to STOP using your credit cards! There is no need to have more than one card, so pick the one with the lowest interest rate and cut up the rest. The one you keep should be deemed an 'emergency card." These are true emergencies, not mere inconveniences. For instance, buying a new TV would not be an emergency, but renting a car in order to get to the bedside of a dying loved one would be. You can carry your emergency card with you, but don't make it too easy to use. One good suggestion is to cover the card tape and paper and write on it: For Emergencies Only.
Tip #2: Move Your Debt
If you have more than one credit card payment, you may want to consider moving debt from a card with a higher APR to one with a lower APR. This will lower the amount of money you are spending towards the interest and get you out of debt faster.
Tip #3: Use the Snowball Principle
List all of your credit card debts, and the amount you are paying each month. Pay off the lowest amount first. Then use that money to start paying off the second lowest amount. And then the next and the next. Let's look at an example.
If you have a $7000, $5000, and $2000 card with payments of $150, $125, and $100, you will finish paying off the $2000 card first. Once it is paid off, you take that $100 and put it towards the $5000 credit card. That means you are now paying $225/month. You have increased your payments which will pay off that credit card sooner and will have you paying a lot less in interest. Once that is paid off, you apply the $225 to the $7000 card, making your monthly payment $375. This will greatly accelerate the payment of this card, reducing your interest payments even further. When everything is paid off, you now have $375/month extra to put towards savings or investments!
Tip #4: Prioritize Your Debt Repayment
One of the best ways to pay off your debts is to get rid of the highest interest payment first. Looking back at the snowball example, you took the lowest and paid it first. If, however, the $2000 card had the lowest interest rate, you would want to pay off the card with the highest rate first. This will save you much more in interest payments.
If the math gets too hard here, don't despair. There are many places on the Internet where you can find good debt reduction calculators. It is then just a matter of punching in your numbers and reading the report.
Tip #5: Consider Consolidation
If you own a home, you may want to consider consolidating your debt using a home equity loan. Since a home loan is a secured loan (they can take away your house if you don't pay) you have a much lower interest rate than you do on your credit cards. Paying a lower interest rate is always a good thing! Not only that, but the interest you pay on your home loan is tax deductible. This is NOT true for credit cards.
By following these tips, anyone can take control of and completely eliminate credit card debt.
Wesley Atkins is the owner of http://www.credit-cards-advisor.com- which aims to get you fitted with the best credit cards to suit your situation. With numerous credit card articles and easy online credit card applications you will never choose the wrong credit card again.
This RSS feed URL is deprecated, please update. New URLs can be found in the footers at https://news.google.com/news
Tips For Getting Your First Credit Card
Most of us get a credit card on our name when we go to college or when we are in our senior years of high school and all of us stumble into the same types of difficulties when it comes to finding an issuer and managing the credit card. Most banks ask for a prior type of credit history that most of the time lacks and for some type of warranty that we will be good payers.
Identity Theft - Who Would Want Mine?
With all my bills who would possibly want my credit? Let them steal my identity and pay my bills! Unfortunately, that's not the way it works. Many of us mistakenly believe that identity thieves hit only the wealthy.
Update Your Computer System With Bad Credit Computer Financing
The moment I placed myself in front of the computer screen a whole new world beckoned me to join it. And years of strolling have proved incompetent to get me acquainted with the full panorama of computers.
Triple AAA in 30 Days
Have you ever wonder about how to get good credit with spending alot of money. Well here is a little secret I used to get my credit back up to par.
Recognizing the Signs that You Might Need Credit Counseling
Most families in America today have a credit card; some have two or more. The type of credit card you own, gold, platinum, ext, is almost a status symbol in society.
Is Your Credit Score Being Held Against You?
Credit Scores That HurtIs your credit score being held against you?More and more the staples of life depend on your credit score. Your mortgage, insurance premiums, employment opportunities and even your landlord may be using your credit score to determine your financial future.
Using Credit Cards Wisely
"I think money was stolen from my card" or "I might have blocked my card in the ATM" - these are frequent problems that bank customer-support officers usually hear from agitated clients. Incorrect use of credit cards or wrong interpretations of their functions are frequent even after tens of years of credit-card extensive use.
How Can A Qualified Mortgage Consultant Help Boost Your Credit Scores?
Consumers interested in purchasing or refinancing a home will pay an interest rate based on current market conditions and their ability to pay back the loan. The borrower's income and debt ratios are taken into consideration by the lender, as well as the predictability factor provided by credit scoring.
Are You The Only One Using Your Name?
Identity theft has become an epidemic. Millions and millions of purses and wallets are stolen everyday and many of them are not just taken for the money inside.
The Art of Stoozing to Make Money from Credit Cards
Make Money from StoozingStoozing, this is a sophisticated method of making money from credit cards that offer 0% introductory periods, the method requires cast iron discipline in never spending on the cards.But, I hear you all ask - what is stoozing and can I do it?Stoozing, in the simplest terms is borrowing money from credit cards that offer a 0% introductory deals and saving that money in a savings account for the duration of the offer on the credit card.
10 Ways of Reducing the Risk of Identity Theft
1- Check your credit report regularly2- Secure personal information in your home, especially if you have roommates, employ outside help, or are having work done in your home.3- minimize the amount of information someone can steal, do not carry extra credit cards, your Social Security card, birth certificate or passport in your wallet or purse, except when needed.
All About Balance Transfers
What is a balance transfer?A balance transfer can be explained simply as a balance transfer! When a balance is transferred usually from a credit card, but possible from a bank account or loan to a credit card with a offer interest rate (usually 0%) for a set period. It does not have to be the entire amount.
How to Repair a Bad Credit Rating
If you have a bad credit rating, then you might find that your ability to get financing, loans, and even some jobs is greatly diminished.Once you have a bad credit rating, it might seem like there's nothing that you can do about it? but you don't have to believe that.
Sound Advice For First Time Credit Card Users
If you are just entering the world of credit cards, there is important information you will need to know in order to manage your credit and your finances effectively. Establishing good habits and a good credit history now is the foundation for a solid financial future.
Finding and Applying for the Right Credit Card Offer Online
Anywhere you go online nowadays, you will see a multitude of ads for credit cards. Some offer low interest rate for an introductory period, or bonus frequent flyer miles while others offer real discounts on new vehicles and equipment.
Always Avoid Payment Holidays
Once you've been paying off a credit card for a while, you might be offered a 'payment holiday'. You'll get a letter, saying that since the company knows it's difficult for some families around Christmas (or whatever other excuse they think up), they're offering you a month off from paying, as a 'special present'.
Low Interest Credit Cards: A Thing of the Past?
With interest rates rising, low or zero percent credit cards may soon become a thing of the past. However, the wise shopper can still secure a low rate by carefully shopping around.
Addressing Bad Credit Card Debt
Spending HabitsSo you've just got your credit card. The first thing you need to be wary about is that a credit card is very easy to use - afterall you can shop in stores, via catalogs and online with your credit card.
Credit Cards and How To Choose Them:
It may seem like a simple question but its important to take into account a few factors when choosing your credit card. If you are in the enviable position of being able to pay off your card every month then you are amongst the few.
SuperCharged Secret 1 of 5 - Credit Card Utopia
I AM THE CONSUMER. AND I HAVE LOW-RATE SUPER-POWERS!Note: The following is part 1 of a 5 part series.
|home | site map|